Updated Post 12 July 2023 @ 14:30pm

We have just received the following information from our Compliance Team with regard to the Kenya Tax table changes.

The tax changes introduced in the Finance Act No.4 of 2023 are suspended by the High Court of Kenya.

The Kenya Revenue Authority confirmed that they have not yet shared any communications regarding this matter.

This means that until further notice, the revised tax tables and the affordable housing levy should not be put into effect.

https://techpoint.africa/2023/07/11/high-court-indefinitely-suspends-kenyas-finance-act-2023/

https://www.reuters.com/world/africa/kenyas-high-court-declines-government-bid-unfreeze-tax-hikes-2023-07-10/

Note: If you have made any changes to your payroll system as per the original communication. You will be required to restore your backups to the original payroll before changes.

We will share more information once received. We apologise for any inconvenience that has been caused

Original 10 July 2023

Release 6.0c which includes new tax tables for Kenya will be deployed on 13/07/2023 at 20:00pm

All changes will be applied in the current pay period and will affect the employee's Nett Salaries.

1. The tax tables are effective from 1 July 2023 and not for the full tax year.
2. Follow the steps below before the deployment to ensure that employees are taxed according to the correct tables.
3. Make a backup of the company

Note: The Tax Table changes are only applicable from 1 July 2023 and not for the full Tax Year.

All steps up to point 7, MUST be completed before the deployment of the update.

Please follow the steps below in your Current Kenya Company:

• Ensure that your Company is in July 2023
• Copy the Company structure to a new number and access the new company
  (On the Company Listing Page, select Manage Companies > Copy Company Structure)
• Access the newly created company to ensure that it is created correctly.
• Transfer employees from the current company to the new company.
  • Transfer without YTD figures.
  • Transfer without Clear Payslip.
  • Termination Date = 30/06/2023
  • Tax Year Start Date = 01/07/2023.
  • Retain existing Engagement Date and Service Periods.
    • (From the Main Menu > Employee >Transfer Employee)
  • Transfer From: (this will be the original Kenya Company)
  • Transfer To: (this will be the new Kenya Company)
• Clear the payslips for July in the current company (this will be in the original company)
  There might be a Tax difference in July because the employees were terminated for a previous month.

Determine how you want to handle the tax differences:

(Refund to the employees; load it as additional tax to get a zero net salary effect; or load it as additional tax to get a zero Net Salary effect and then load the same values in the new company as additional tax)

• Print a report with Tax values per employee.
• Print month-end reports and create payment files if needed.
• Make a backup and roll the company with terminated employees to a new pay period to avoid any further tax calculations.

Follow the steps below in your New Company

• Ensure that all Payslip values are correct.
• Do the input for July.
• If you decided to carry tax values to the new company – capture the additional tax values.

After the deployment, information regarding the changes will be available in the What’s New document, on the Subscription page.