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Taxes a Consultant Should Pay in Kenya
A consultant in Kenya is considered self-employed and is responsible for paying various taxes. These taxes are determined by the nature of their work, income, and other factors. Here's a breakdown of the taxes a consultant should pay in Kenya:
1. Income Tax
Consultants in Kenya are subject to income tax on their earnings. The income tax rate is progressive, meaning it increases as income rises. The current income tax rates in Kenya are as follows:
| Income Range (KES) | Tax Rate (%) |
|---|---|
| 0 - 12,298 | 10 |
| 12,299 - 23,885 | 15 |
| 23,886 - 35,472 | 20 |
| 35,473 - 47,059 | 25 |
| 47,060 and above | 30 |
Source: Kenya Revenue Authority (KRA) ↗
2. Value Added Tax (VAT)
Consultants who register for VAT are required to charge VAT on their services. The standard VAT rate in Kenya is 16%. However, some services are exempt from VAT, such as financial services and medical services.
Source: Kenya Revenue Authority (KRA) ↗
3. Withholding Tax
Consultants may be subject to withholding tax on payments they receive from clients. The withholding tax rate varies depending on the type of payment. For example, the withholding tax rate on consultancy fees paid to a resident consultant is 15%.
Source: Kenya Revenue Authority (KRA) ↗
4. Self-Employment Tax
Consultants are also required to pay self-employment tax, which covers contributions to the National Social Security Fund (NSSF) and the National Hospital Insurance Fund (NHIF). The self-employment tax rate is 15.3%, which is divided between NSSF (6%) and NHIF (9.3%).
Source: Kenya Revenue Authority (KRA) ↗
5. Other Taxes
Consultants may also be subject to other taxes, such as:
Turnover Tax: This tax is levied on businesses with a turnover of less than KES 5 million.
Property Tax: This tax is levied on property owned by the consultant.
Motor Vehicle Tax: This tax is levied on vehicles owned by the consultant.
Filing Taxes
Consultants are required to file their taxes annually with the Kenya Revenue Authority (KRA). The tax filing deadline is usually in June of the following year. Consultants can file their taxes online through the KRA's iTax portal.
Source: Kenya Revenue Authority (KRA) ↗
Conclusion
Consultants in Kenya are responsible for paying various taxes, including income tax, VAT, withholding tax, and self-employment tax. It is important for consultants to understand their tax obligations and to file their taxes on time to avoid penalties. Consulting with a tax advisor can help consultants ensure they are complying with all tax laws and regulations.
Answered by mwakili.com