Market News

Applications for tax relief schemes, certificates now automated

times-tower
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Summary

  • The Kenya Revenue Authority(KRA) has automated applications for tax exemption certificates and registration of tax relief schemes in a bid to improve efficiency and raise compliance.
  • The taxman said retirement benefits and collective investment schemes, units trusts, employee share ownership plans (ESOP) and real estate investment trusts (Reits) that wish to register tax relief schemes can now do so on its online i-Tax portal.

The Kenya Revenue Authority(KRA) has automated applications for tax exemption certificates and registration of tax relief schemes in a bid to improve efficiency and raise compliance.

The taxman said retirement benefits and collective investment schemes, units trusts, employee share ownership plans (ESOP) and real estate investment trusts (Reits) that wish to register tax relief schemes can now do so on its online i-Tax portal.

“Qualifying applicants will receive income tax exemption certificates through their registered e-mail addresses” KRA Commissioner for Domestic Taxes, Rispah Simiyu said.

The tax man said all schemes that had previously been issued with income tax exemption certificates will be required to apply for the iTax generated certificates.

KRA is targeting retirement benefits schemes (RBS)and collective investment scheme such as units trusts, ESOP and Reits for tax income exemption registration.

Previously Reits were only obliged to get approval from the Capital Markets Authority (CMA).

The move is aimed at raising KRA involvement in declarations on returns in order to seal any possible loopholes in tax collection.

It comes after the National Treasury also announced to amend Capital Markets Act, Income Tax Act, VAT and Excise Duty Act through the Finance Bill 2021 to help the state meet its budget proposals.

The law provides some tax benefits for contributing to an investment scheme to them more attractive to the members and boost investment.

However, the scheme has to be registered to enjoy the exemption with the commissioner of domestic taxes.

Collective Investment schemes are exempt from tax on their incomes except for payment of withholding tax on dividends or interest to unit holders.

Contributions by members of RBS are tax deductible up to a maximum of Sh20,000 per month or Sh240,000 yearly.