The Government, through the Kenya Finance Act 2017/ 2018, revised the resident individual tax brackets and increased the monthly personal relief from KES. 1,280 to KES. 1,408 with effect from 1st January 2018. The tax bands and personal relief have been expanded by 10%. This is the second consecutive year that the bands have been expanded by this percentage. The expansion of income tax bands, together with the exemption of bonuses, overtime and retirement benefits of low income earners (income below the revised lowest tax bracket of 10%, up to KES. 12,298 per month or KES. 147,580 per annum), will marginally reduce the PAYE (Pay as You Earn) burden. However, please note that this doesn’t translate to a 10% PAYE reduction.
Therefore, starting with the PAYE return for the January payroll that is due on 9th February 2018, employers, employees and the general public are advised to implement the following changes to their payroll processing:
|
Monthly Taxable Pay (KES.) |
Annual Taxable Pay (KES.) |
Tax Rate (%) |
|
Up to 12,298 |
Up to 147,580 |
10 |
|
12,299 – 23,885 |
147,581 – 286,623 |
15 |
|
23,886 – 35,472 |
286,624 – 425,666 |
20 |
|
35,473 – 47,059 |
425,667 – 564,709 |
25 |
|
Above 47,059 |
Above 564,709 |
30 |
|
Monthly Relief: 1,408 |
Annual Relief: 16,896 |
|
For further information or assistance, please get in touch with us through the contacts below:
Peter Anchinga,
Anchinga & Associates,
Office Lines: +254 700 16 16 99, +254 780 16 16 99
Mobile: +254 722 72 15 50
Email: anchinga@pna.co.ke