Withholding Tax on Construction in Kenya

Sure, I can help you with that. Here's a guide on how to file KRA returns with withholding tax using your phone. Filing your Kenya Revenue Authority (KRA) returns with withholding tax doesn't have to be a complicated process. With your smartphone, you can easily complete this task in a few simple steps. This guide will walk you through the process of filing your KRA returns with withholding tax.

What You Need Before You Start

Before you start, ensure you have the following:

- Your KRA PIN: This is a unique personal identification number that every taxpayer in Kenya needs.


- Your iTax password: This is the password you use to log in to your iTax account.


- Withholding Tax Certificates: These are documents issued by the person who withheld your tax. They contain details of the income you earned and the tax that was withheld.

Read More: How to Calculate Withholding Tax on Invoice in Kenya

Step-by-Step Guide to Filing KRA Returns with Withholding Tax on Your Phone

 Step 1: Access the iTax Portal


Open your phone's browser and go to the KRA iTax portal. The website is mobile-friendly, so you should have no trouble navigating it on your phone.


Step 2: Log in to Your iTax Account


Enter your KRA PIN and iTax password to log in. If you've forgotten your password, click on the 'Forgot Password/Unlock Account' link and follow the prompts to reset it.


Step 3: Navigate to the Returns Menu


Once you're logged in, click on the 'Returns' menu at the top of the page. From the drop-down menu, select 'File Returns'.


Step 4: Select the Type of Returns


You'll be directed to a new page where you'll select the type of returns you want to file. If you're an individual, select 'Income Tax - Resident Individual'.

Read More: Withholding Tax on Contractual Fees in Kenya


Step 5: Fill in the Returns Form


You'll be presented with an online form to fill in your details. In the section for income details, you'll need to enter the details from your Withholding Tax Certificates. Make sure to fill in all the required fields accurately.


Step 6: Submit Your Returns


After filling in all the details, click on the 'Submit' button. You'll receive a confirmation message and an acknowledgment receipt.


Step 7: Download Your Returns Receipt


For your records, download and save your returns receipt. You can also print it out if you wish.

Conclusion

Filing your KRA returns with withholding tax doesn't have to be a stressful process. With your smartphone and a stable internet connection, you can easily file your returns from the comfort of your home or office. Remember, it's important to file your returns on time to avoid penalties. Happy filing!

(Note: This is a simplified guide and the actual process may have more detailed steps depending on your tax situation. Always consult with a tax professional if you're unsure about anything.)

FAQs

What is the construction tax in Kenya?


In Kenya, payments for construction contracts are subject to withholding tax. If you're a resident contractor, the person paying for your services is required to withhold tax at a rate of 3% and remit it to the Kenya Revenue Authority (KRA).


What is the VAT rate for withholding in Kenya?


The withholding VAT rate in Kenya is 6%. This means that if you're a registered VAT supplier and you supply goods or services to a person appointed as a withholding VAT agent, the agent will withhold 6% of the taxable value of the supply and remit it to KRA.


What is the final withholding tax?


Final withholding tax is a tax that is deducted at source and is not subject to further taxation. In other words, once the tax is withheld and remitted to the tax authorities, the income is considered to be fully taxed. The rate of final withholding tax varies depending on the type of income and the tax jurisdiction.


Is withholding tax an asset or liability?


Withholding tax is considered a liability. When a payment is made and tax is withheld, the person or entity making the payment records the tax as a withholding tax liability. When the tax is remitted to the tax authorities, the liability is cleared. For the person or entity receiving the payment, the withheld tax could be an asset if it can be used to offset future tax liabilities.
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