Advance Tax in Kenya

Advance tax in Kenya plays a crucial role in tax compliance, especially for motor vehicle owners in Kenya. Understanding advance tax, how to pay it, and how it’s calculated is essential for ensuring you remain compliant with Kenya Revenue Authority (KRA) regulations. In this guide, we’ll walk you through the steps of paying and filing advance tax, calculating it, and using advance tax credits.

For expert help, feel free to reach out to Tax Experts at info@taxexperts.co.ke or 0797 777077.

What is Advance Tax?

Advance tax refers to a tax paid before a motor vehicle is used for commercial purposes in Kenya. It specifically applies to commercial vehicles, such as trucks, buses, and taxis. This tax must be paid annually, whether or not the vehicle generates income during that period.

Advance tax ensures motor vehicle owners contribute to government revenues, even before earning income from the vehicle’s use. Moreover, this tax is mandatory under Kenyan law for all vehicles that are used commercially.

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How to Pay Advance Tax for a Motor Vehicle

Paying advance tax is a straightforward process that can be done through the KRA iTax portal. Follow these steps to ensure you complete the process correctly:

1. Log in to the KRA iTax Portal

• First, go to the KRA iTax website and log in using your PIN and password.

2. Navigate to the Payments Section

• Once logged in, select the Advance Tax Payment option under the Payments section.

3. Input Motor Vehicle Details

• Next, enter your motor vehicle’s registration details and confirm the type of vehicle (e.g., truck, bus, or taxi).

4. Review and Calculate Advance Tax

• The system will automatically calculate the advance tax amount based on the vehicle’s category and other details.

5. Generate a Payment Slip

• Once the details are correct, generate the payment slip.

6. Complete Payment

• You can then make your payment via M-Pesa, bank transfer, or another available method.

For further clarification, don’t hesitate to contact info@taxexperts.co.ke or call 0797 777077.

How to File Advance Tax in Kenya

After paying the advance tax, filing the payment with KRA is the next crucial step. Filing updates your tax records and ensures you are fully compliant.

Steps to File Advance Tax:

1. Log into the KRA iTax Portal
   • Begin by using your KRA PIN and password to log into iTax.
2. Navigate to the Returns Section
   • Under the Returns section, select File Advance Tax Return.
3. Enter Required Information
   • Input your motor vehicle details along with the confirmation from your advance tax payment.
4. Submit the Return
   • After confirming all details, submit the return to KRA.

If you require further guidance, reach out to Tax Experts at 0797 777077 or info@taxexperts.co.ke.

How is Advance Tax Calculated?

Advance tax calculations vary depending on the type of motor vehicle. KRA sets specific rates based on the vehicle category and its attributes. The key criteria include:

• Public Service Vehicles (PSVs) and Commercial Vehicles pay tax based on:
  • Engine capacity or
  • Seating capacity (for PSVs like buses or matatus).

Example:

• For saloon cars and station wagons (used for hire), the tax is Ksh 1,500 per year or Ksh 60 per passenger capacity.
• Lorries are taxed according to their tonnage and engine size.

For a personalized tax calculation, feel free to contact Tax Experts.

What is Advance Tax Credit?

An advance tax credit allows you to offset the amount of advance tax you have paid against your final tax liability. Essentially, this means that if you have already paid a portion of your taxes as advance tax, that amount will be subtracted from your overall tax bill.

For instance, if your final tax liability for the year is Ksh 100,000, and you have already paid Ksh 20,000 in advance tax, you’ll only be required to pay the remaining Ksh 80,000.

Need more details? Contact info@taxexperts.co.ke or call 0797 777077.

Conclusion

Paying and filing advance tax in Kenya is an important responsibility for owners of commercial vehicles. By understanding how to pay, file, and calculate advance tax, and how to use advance tax credits, you can ensure compliance with KRA regulations while avoiding penalties.

If you have any questions or need assistance with advance tax, don’t hesitate to contact Tax Experts today:

• Email: info@taxexperts.co.ke
• Phone: 0797 777077
• Website: www.taxexperts.co.ke

Stay compliant, and ensure your commercial vehicle remains legally operational by getting expert tax assistance.

For professional support, reach out to Tax Experts today!