We plan and prepare installment taxes for clients both on-site and remotely.
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What is Installment Tax?
Installment tax is estimated income tax paid to KRA periodically, in anticipation of the tax payable for a year of income. Installment tax is a form of advance tax administered under the Income Tax Act Cap 470, laws of Kenya. Installment Tax is paid in advance at four equal installments. It is paid before the year of income is over and before the accounts of the business are prepared to establish the actual tax payable.
Schedule of payment
The installments are spread evenly at 25% of the tax due and payable on the 20th day of the 4th, 6th, 9th and 12th months of the year of income for all taxpayers expect those in the Agricultural Sector.
Taxpayers in the Agricultural Sector pay in installments of 75% in the 9th month and 25% in the 12th month.
NB: Balance of Tax (return balance) is to be paid by end of the 4th month after the year-end. i.e. by 30th April 2020 for December year-end cases.
What is the Penalty for late filing and payment?
Penalty for the late payment of Income Tax shall apply.
The penalty of underpaying Installment tax is 20% of the difference between the amount of installment tax payable in respect of a year of income and the instalment tax actually paid.
Disclaimer. Information provided here does not constitute legal, financial or tax advice. As such, consult you tax advisor.
