The Kenyan tax system comprises both direct and indirect form of taxes. These include Income Tax, Customs and Excise Duties and Value Added Tax (VAT). The Government of Kenya, through the Kenya Revenue Authority, requires all companies and all workers to pay taxes. These taxes can be filed online on the iTax Portal
Income tax is payable at the corporation rate by companies and unincorporated organisations and associations (excluding partnerships, sole proprietorships, and interest or dividend paid by a designated co-operative society) that have taxable income as defined by the Income Tax Act. The income of a partnership or a sole proprietorship is not taxable on the business entity but is taxed on the individual partner or the proprietor. Each partner of a partnership and a sole proprietor is therefore required to declare his business and professional income as part of his personal income and pay tax according to his respective personal tax bracket.
Exemptions from corporation tax, on the application to the Commissioner, may be granted to entities of public character established solely for the relief of poverty or distress of the public, or for the advancement of religion or education and pension trusts and some other qualifying bodies.
The National government offers several tax based incentives mainly covering exemptions from duty and VAT on capital equipment and machinery to be used in the investment project. Other incentives include capital deductions and investment allowances.
Read more about the taxation regime in Kenya on the Kenya Revenue Authority Website
County Taxes, User Charges and Fees
At the county level, every business must be licensed to operate within the county. Business licenses are obtained from the sub-county offices but the County government is streamlining the process to come up with a Single Business Permit that can be applied for and paid for electronically.
Other County taxes include Land Rates and Land Rent that are based on the assessed value of the land.