President of the Republic of Kenya outlined the measures the government intends to make to cushion the country against the economic effects of COVID-19. He assented to the Tax Laws (Amendment) Act, 2020 on 25 April 2020. See attached.
The Tax Laws (Amendment) Act 2020
KRA Public Notice 2704/2020 Taxation of emoluments/pensions
The following PAYE changes were approved:
- Change in Personal Relief – Third Schedule, Head A(1)
Annual personal relief has increased from KSh16 896 to KSh28 800.
- Change in tax table – Third Schedule, Head B(1)
|
Annual taxable Income (KSh) |
Tax Rate |
|
|
From |
To |
|
|
0,00 |
288 000,00 |
10% |
|
288 000,01 |
488 000,00 |
15% |
|
488 000,01 |
688 000,00 |
20% |
|
688 000,01 |
and above |
25% |
The effective date 25 April 2020.
PAYE is deducted upon payment of the salary and where payment is made after the effective date, the new rates should apply.
Take note: The Kenya P10 iTAX and P9 Deduction Card report has been updated and an be downloaded here
Update 07/05/2020
Following the change in the Kenya tax table, the tax rate for secondary employees has been updated to 25% (previously 30%) - refer to the Additional information document included in the download for more information
Before installing the software, take note of the following:
- Your payroll software must be on Release 5.4a.
- Make a full system backup before installing any new tax file
When should I install the new tax files?
- If employees were paid before 25 April 2020, the new tax files should be installed only when your Kenya companies are in May 2020, to apply the tax relief in the new month.
- Where employees are paid on or after 25 April 2020, the tax files should be installed in your April payroll to apply the tax relief. If you have already paid employees, take note the nett salary will be affected.
Click here to visit software downloads page and follow the instructions below:
- Select the Africa tab.
- For installation instructions click on the Download button next to Africa Tax Changes Installation Notes for Classic/Premier/Sage200c or click here.
- Click on the Download button next to Kenya Covid-19 Statutory Changes for Premier/Sage200c: R5.4a (April 2020 – File Version: 202004) and follow the installation instructions.
- For more information on the Kenya tax update, refer the document "Kenya - Additional Information.pdf" included in your download.
- Once installed, ensure to do a General Recalculation in all Kenya payroll companies.