Full Answer Section

• Import Duties and Excise Duties: Taxes levied on imported goods and certain locally produced goods.  

• Property Taxes: Taxes on property owned by the business.  

2. Current Corporate Income Tax Rate:

• The current corporate income tax rate in Kenya is 30%.  

3. Calculation of Corporate Income Tax:

• Determine Taxable Income:

  • Calculate total income earned by the business.
  • Deduct allowable expenses (see below).
  • The remaining amount is the taxable income.

• Calculate Tax Liability:

  • Multiply the taxable income by the corporate income tax rate (30%).

4. Deductible Expenses:

Businesses can deduct the following expenses when calculating their taxable income:

• Cost of Goods Sold: The direct costs associated with producing or acquiring goods for sale.
• Salaries and Wages: Salaries and wages paid to employees.
• Rent and Utilities: Rent for office space, utilities (electricity, water, internet).
• Depreciation: The decline in value of business assets over time.  

• Interest Expenses: Interest paid on loans.
• Research and Development Expenses: Costs incurred in research and development activities.  

• Charitable Donations: Donations to approved charitable organizations.  

5. Deadline for Paying Corporate Income Tax:

• The deadline for paying corporate income tax in Kenya is usually within six months after the end of the company’s financial year.  

6. Extending the Tax Payment Deadline:

• Businesses may be able to obtain an extension for paying their taxes under certain circumstances.
• Applications for extensions must be submitted to the Kenya Revenue Authority (KRA) before the original due date.
• KRA may grant an extension if there are reasonable grounds for doing so, such as unforeseen circumstances or the need for more time to prepare the necessary documentation.