KRA informs the public on changes to Corporation Tax rates through the Tax Laws (Amendment) Act published on 25th April, 2020 and the Tax Laws (Amendment) Act No. 2 of 2020 published on 24th December, 2020 which provided for resident corporation tax rates of 25% and 30% respectively. In light of the above, corporation tax rates shall apply as follows:
- 30% on income of a person whose accounting period ended on or before 30th March, 2020.
- 25% on income of a person whose accounting period ended between 1st April, 2020 and 31st December, 2020.
- For persons whose accounting period ends after 1st January, 2021, the Corporation Tax rate shall be applied as follows;
- 25% for income earned in the period prior to 1st January, 2021.
- 30% for income earned in the period on or after 1st January, 2021.
Provided that a person to whom (3) applies shall determine the income for the accounting period and apportion the same between the two periods and charge the applicable rates.
Further, KRA informs taxpayers that the process of enhancement of the iTax System is underway to incorporate the interpretation referred to above.
In the intervening period, taxpayers are advised to prepare their accounts and submit returns through the current iTax system and pay the correct amount of tax. Any erroneous penalties or interest once validated shall be corrected when the system is fully deployed.
For further clarification and facilitation, please call the Contact Centre on Tel: 020 4 999 999, 0711 099 999 or Email: firstname.lastname@example.org