Wazua
»
Market
»
Pennywise
»
Kenya Tax Burden
Rank: Veteran Joined: 1/3/2014 Posts: 1,063
|
nakujua wrote:PeterReborn wrote:Swenani wrote:PeterReborn wrote:kenmac wrote:Swenani wrote:ChumviMacho wrote:Hello Wazuans,
I am desperate to reduce my taxes and wonder if anyone has tips on reducing their income tax. I have taken out an education policy and a HOSP (Home Ownership Savings Plan)but the saving is marginal. I know taxes are certain in life but wonder if you guys have other ideas on trimming your payables to KRA?
I am employed and run a small biz on the side. Inflation is biting hard and I am beginning to feel the heat in my pocket.
Again, there was talk last year about widening the tax bands, is that something we can lobby for? methinks taxing anyone earning less than 20K is immoral and for people earning less than 50K to be at the top rate is just not fair?
Any thoughts, ideas? Register a company,then ask your current employer to employ you as a company and not as an individual.  Brilliant answer. Will you not pay the corporate tax @30% which will be higher than the graduated scale rates? When your register a company,you can be able to deduct the following expenses creatively before taxation 1.Fuel /transport costs 2.WTA on your house(Register your house in the company's name and call it office premises) 3.Meals for your and your family(your can call it employee meals or employee welfare) 4.House keeping expenses(Office maintenance) 5.Savings 6.House helps salary(You can call it wages to casuals etc. 7.Buy a company car and charge WTA. 8.Charge WTA on your company(of course its yours) electronics(TV;s phones, computers etc), furniture etc Deduct everything and declare a loss to KRA  You are a genius. wewe @Swenani, naona wewe ni genius - saidia hapa. my neighbor came across some guys willing to hire them as a consultant na waka kubaliana the coins they will pay after my neighbor delivers on some tasks; my neighbor asked me these questions nikamwambia sina time, will answer him latter. 1. They say they will take care of withholding tax - sijui how that works. saidia hapo 2. can one invoice under their name, ama one must register a ka business name for that, if not does one weka pin number hapo kwa invoice. 3. how does consultancy income reflect on ones tax obligation, and must your pin be online. 4. if one has been out of employment for a very long time, will that ka gap in the tax records have issues. niambie jirani nini? anyone who knows hii mambo saidia naomba Withholding tax is tax deducted at the source.If you are a consultant,you wont get the full invoice amount.some amout will be deducted by the customer and remitted to KRA.He needs to get a WHT certificate from the customer to confirm that the amount deducted was for WHT and remiited to KRA. 2.Depends on how he has registered his business.Generally you want to separate the individual from the business. 3)For consultancy income the WHT is normally the final tax.If you have other sources of income,then graduated scale rate will be used to calculated the tax payable and then deduct the WHT since it has already been paid. 4If one has been out of employment,then they need to file zero returns to show this otherwise iko penalty. Consistency is better than intensity
|
|
|
Rank: Veteran Joined: 2/2/2012 Posts: 1,134 Location: Nairobi
|
PeterReborn wrote:nakujua wrote:PeterReborn wrote:Swenani wrote:PeterReborn wrote:kenmac wrote:Swenani wrote:ChumviMacho wrote:Hello Wazuans,
I am desperate to reduce my taxes and wonder if anyone has tips on reducing their income tax. I have taken out an education policy and a HOSP (Home Ownership Savings Plan)but the saving is marginal. I know taxes are certain in life but wonder if you guys have other ideas on trimming your payables to KRA?
I am employed and run a small biz on the side. Inflation is biting hard and I am beginning to feel the heat in my pocket.
Again, there was talk last year about widening the tax bands, is that something we can lobby for? methinks taxing anyone earning less than 20K is immoral and for people earning less than 50K to be at the top rate is just not fair?
Any thoughts, ideas? Register a company,then ask your current employer to employ you as a company and not as an individual. Brilliant answer. Will you not pay the corporate tax @30% which will be higher than the graduated scale rates? When your register a company,you can be able to deduct the following expenses creatively before taxation 1.Fuel /transport costs 2.WTA on your house(Register your house in the company's name and call it office premises) 3.Meals for your and your family(your can call it employee meals or employee welfare) 4.House keeping expenses(Office maintenance) 5.Savings 6.House helps salary(You can call it wages to casuals etc. 7.Buy a company car and charge WTA. 8.Charge WTA on your company(of course its yours) electronics(TV;s phones, computers etc), furniture etc Deduct everything and declare a loss to KRA You are a genius. wewe @Swenani, naona wewe ni genius - saidia hapa. my neighbor came across some guys willing to hire them as a consultant na waka kubaliana the coins they will pay after my neighbor delivers on some tasks; my neighbor asked me these questions nikamwambia sina time, will answer him latter. 1. They say they will take care of withholding tax - sijui how that works. saidia hapo 2. can one invoice under their name, ama one must register a ka business name for that, if not does one weka pin number hapo kwa invoice. 3. how does consultancy income reflect on ones tax obligation, and must your pin be online. 4. if one has been out of employment for a very long time, will that ka gap in the tax records have issues. niambie jirani nini? anyone who knows hii mambo saidia naomba Withholding tax is tax deducted at the source.If you are a consultant,you wont get the full invoice amount.some amout will be deducted by the customer and remitted to KRA.He needs to get a WHT certificate from the customer to confirm that the amount deducted was for WHT and remiited to KRA. 2.Depends on how he has registered his business.Generally you want to separate the individual from the business. 3)For consultancy income the WHT is normally the final tax.If you have other sources of income,then graduated scale rate will be used to calculated the tax payable and then deduct the WHT since it has already been paid. 4If one has been out of employment,then they need to file zero returns to show this otherwise iko penalty. No! It is not a final tax!
|
|
|
Rank: Elder Joined: 12/4/2009 Posts: 10,808 Location: NAIROBI
|
NHIF ndio hiyo deduction pap Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
|
|
|
Rank: Elder Joined: 9/29/2006 Posts: 2,570
|
Ericsson wrote:NHIF ndio hiyo deduction pap That means you've your April pay! The opposite of courage is not cowardice, it's conformity.
|
|
|
Rank: Member Joined: 5/3/2010 Posts: 145 Location: East Africa
|
Business tax avoidance
Abstract Case:
A business has an annual turnover of kshs 5m and a profit of 2m. TOT of 3% takes out kshs 150k from the profit leaving kshs 1.85m.
Anticipating increase of revenue to kshs 7m and profit to kshs 2.8m. corporate tax will take 30% of profit (kshs 840,000).
My thoughts: If someone splits the biashara into two units so as to keep the biashara within TOT threshhold. This would mean the kshs 7m revenue would give a tax of Kshs 210,000 against a tax of about Kshs 840,000 under the corporate tax. A saving of about Kshs 630,000.
what do you think? workable?
|
|
|
Rank: New-farer Joined: 1/21/2015 Posts: 78 Location: Pare Pare
|
Stealth wrote:Business tax avoidance
Abstract Case:
A business has an annual turnover of kshs 5m and a profit of 2m. TOT of 3% takes out kshs 150k from the profit leaving kshs 1.85m.
Anticipating increase of revenue to kshs 7m and profit to kshs 2.8m. corporate tax will take 30% of profit (kshs 840,000).
My thoughts: If someone splits the biashara into two units so as to keep the biashara within TOT threshhold. This would mean the kshs 7m revenue would give a tax of Kshs 210,000 against a tax of about Kshs 840,000 under the corporate tax. A saving of about Kshs 630,000.
what do you think? workable?
That is a simple yet valid case of tax planning. The arrangement should work as it fits the TOT specifications. However, arrangements should be laid well in advance.
|
|
|
Rank: New-farer Joined: 1/21/2015 Posts: 78 Location: Pare Pare
|
Chaka wrote:Is there such a thing as a LLC having only one director?Is a sole proprietor Co. also entitled to those WTA deductions? As per the Companies Act (cap 486), an LLC can only have a minimum of 2 and maximum of 7 directions. On the sole proprietorship question, Withholding tax is a form of Income Tax. As such, one is entitled to deductions. Check the list of deductions/ Incentives for individual taxpayers here.
|
|
|
Rank: Elder Joined: 11/15/2011 Posts: 4,518
|
Lolest! wrote:whiteowl wrote:murchr wrote:Swenani wrote:PeterReborn wrote:kenmac wrote:Swenani wrote:Register a company,then ask your current employer to employ you as a company and not as an individual. Brilliant answer. Will you not pay the corporate tax @30% which will be higher than the graduated scale rates? When your register a company,you can be able to deduct the following expenses creatively before taxation 1.Fuel /transport costs 2.WTA on your house(Register your house in the company's name and call it office premises) 3.Meals for your and your family(your can call it employee meals or employee welfare) 4.House keeping expenses(Office maintenance) 5.Savings 6.House helps salary(You can call it wages to casuals etc. 7.Buy a company car and charge WTA. 8.Charge WTA on your company(of course its yours) electronics(TV;s phones, computers etc), furniture etc Deduct everything and declare a loss to KRA Yes, if you are working online. Not practical otherwise You can declare some small profit so as not to spook KRA guys I know some one man show that runs with some of Swenani's ideas The owner's car is a company car. The wife and mum's car are also serviced by the company Claims meals from the company Supermarket shopping Drawings are incorporated into expense lines That's why they introduced that minimum tax nonsense that has just been quashed by the High Court. But.. "The true measure of a man is how he treats someone who can do him absolutely no good.
|
|
|
Rank: Member Joined: 12/24/2008 Posts: 112
|
With thresh-hold on TOT being raised to Kshs. 50m from Kshs. 5m on annual turnover, and with a tax reduction on turn-over rate of 1% from 3% previously- this is very attractive for SME's.
Could be the reason KRA/iTax making taxpayers wanting to migrate to this regime jump through hoops - mara you must be tax compliant, then you must have filed your returns for FY 2020, mara your application will be vetted by KRA before consideration is given to permit you to migrate to TOT etc.
|
|
|
Wazua
»
Market
»
Pennywise
»
Kenya Tax Burden
Forum Jump
You cannot post new topics in this forum.
You cannot reply to topics in this forum.
You cannot delete your posts in this forum.
You cannot edit your posts in this forum.
You cannot create polls in this forum.
You cannot vote in polls in this forum.
|