Withholding tax in Kenya: what to deduct, remit and certify
When you pay certain fees, part of the payment belongs to KRA. Deduct it, remit it quickly and give the supplier a certificate.
By HMG Editorial Team · Published
What withholding tax is
Withholding tax is deducted at source when a business makes certain payments, such as professional, management and consultancy fees, contractual fees, commissions, dividends, interest and some payments to non-residents. The payer keeps back part of the payment and pays it to KRA on the supplier's behalf.
Rates depend on the type of payment and on whether the recipient is resident. They change from time to time, so check KRA's current schedule before you set up a new type of payment.
Remit quickly and issue certificates
Withholding tax is declared and paid on iTax, which generates a withholding certificate for the supplier. Remittance deadlines are short, measured in working days after the deduction, so build the step into your payment run rather than doing it at month-end.
Late remittance is costly for the payer: the tax not remitted becomes a debt, with penalties and interest, and suppliers chase certificates they need for their own returns.
When you are the one being paid
If customers withhold tax from your invoices, the amount is not lost. It is credited against your income tax, but only if the certificates appear on your iTax ledger. Reconcile them every month and chase any that are missing.
Unmatched certificates are one of the most common reasons an income tax return shows more tax due than expected.
This article is general guidance only and is not individual tax, legal or accounting advice. Rules change; confirm your position with an HMG consultant before acting.
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