What is Advanced Tax?
Advance tax is a type of tax that is paid in advance of the final tax liability. It is usually paid on a quarterly or monthly basis, and is based on the taxpayer’s estimated income for the year. It can be paid by individuals, businesses, and other organizations.
Requirements for application of Advanced Tax
- You must be a resident of Kenya.
- Your passport or national ID card
- You must have a valid taxpayer identification number (TIN).
- You must be able to provide evidence of your estimated income for the year.
- You must be able to provide evidence of your estimated expenses for the year.
How to apply for Advanced Tax
- Go to the KRA website.
- Click on the “Taxes” tab.
- Click on the “Advanced Tax” link.
- Fill out the online application form.
- Submit the application form.
The online application form will ask for the following information:
- Your taxpayer identification number (TIN)
- Your name
- Your business name (if applicable)
- Your address
- Your phone number
- Your email address
- Your estimated income for the year
- Your estimated expenses for the year
- Submit the application form:
Cost for application for Advance Tax
There is no cost for applying in Kenya.
The amount you will need to pay will depend on your estimated income for the year. The KRA has published a table of rates that you can use to calculate the amount of tax you will need to pay.
You can find the KRA’s table of advance tax rates on their website: https://www.kra.go.ke/
It will cost you Ksh 200 at nikonet cyber to help you apply for your advance tax.
Frequently asked questions
When is advance tax due
On the 15th of each month.
How is it calculated?
Advance tax is calculated based on your estimated income for the year. The Kenya Revenue Authority (KRA) has published a table of advance tax rates that you can use to calculate the amount you will need to pay.
Where can I pay?
You can pay at any KRA office or online.
What happens if I do not pay?
If you do not pay in full, you may be subject to penalties and interest.
What are the penalties for not paying?
The penalties for not paying advance tax are as follows:
- For the first month of default, a penalty of 5% of the unpaid tax is payable.
- For the second and subsequent months of default, a penalty of 10% of the unpaid tax is payable.
What are the interest rates for late payment of advance tax?
The interest rates for late payment of advance tax are as follows:
- For the first month of default, interest is payable at the rate of 1% per month.
- For the second and subsequent months of default, interest is payable at the rate of 2% per month.
What are the benefits?
There are a number of benefits to paying including:
- It can help to prevent tax evasion.
- It can improve the government’s cash flow.
- It can make it easier to file taxes at the end of the year.
What are the drawbacks of advance tax?
There are a few drawbacks to paying, including:
- It can be difficult to estimate your income for the year.
- If you pay too much, you may have to wait several weeks to get a refund.
Overall, advance tax can be a helpful way to ensure that you pay the correct amount of taxes each year. However, it is important to understand the benefits and drawbacks before you decide whether or not to pay it.