Bell-Mount & Associates.
What is Voluntary Tax Disclosure Programme (VTDP)
This is a programme where a taxpayer confidentially discloses tax liabilities that were previously undisclosed to the Commissioner for the purpose of being granted relief of penalties and interest of the tax disclosed.
How to apply for Voluntary Tax Disclosure Programme (VTDP)
1.Apply on iTax on prescribed return specific for the tax head under disclosure. Upon successful application ,you will receive an acknowledgement slip via email.
2.In case of iTax system downtime, you ‘ll be required to submit a manual application to your respective Tax service Office. A manual application shall consist of a duly filled and signed VTDP application form together with a tax return(s) for the period(s) containing the following information.
VAT Rates Changes.
Kenya Revenue Authority informs the public on changes of tax rates introduced through the Tax Laws (Amendment) No. 2 Act of 2020 which was published on 24th December, 2020 with respect to employment income, Corporation Tax, and Legal Notice No. 206 of 2020 on Value Added Tax. The new tax rates replace those introduced in April 2020.
Individual Income Tax Rates
The following tax rates shall apply to individual income with effect from 1st January, 2021. The first monthly PAYE return under the new rate shall be due by 9th February, 2021.
Individual Income Tax Bands and applicable rates
|Tax Band||Rate of Tax|
|On the First KShs 24,000 per month or KShs 288,000 per annum||10%|
|On the next KShs 8,333 per month or KShs 100,000 per annum||25%|
|On all income amounts in excess of KShs 32,333 per month or KShs 388,000 per annum||30%|
The applicable monthly personal relief is KShs 2,400 per month or KShs 28,800 annually.
Pension Tax Bands
|Pension Bands||Annual Tax Rates|
|Any amount in excess of tax free amounts:|
|On first KShs 400,000||10%|
|On next KShs 400,000||15%|
|On next KShs 400,000||20%|
|On next KShs 400,000||25%|
|On any amount in excess of KShs 1,600,000||30%|
For pension income withdrawn before expiry of 15 years of pensionable service, the new individual tax bands and rates are applicable on any amount withdrawn in excess of tax-free amount.
The rate of Corporation Tax is 30% of taxable income with effect from 1st January, 2021.
Value Added Tax
The rate of Value Added Tax is 16% with effect from 1st January, 2021. The first return under the new rate is due by 20th February, 2021.