Instalment Tax Steps to Comply and Minimize Risk

Description

Taxpayers are expected to pay income tax on instalment basis within the year of income. Instalment tax is not a tax but a method of paying income tax within the year of income. Individual taxpayers paying more than kshs 40,000 in income tax and all non-individual taxpayers irrespective of the amount of income tax they pay in a year of income are expected to pay income tax on an instalment basis. However, some taxpayers are explicitly exempted from paying income tax or pay tax under other arrangements. Failure to follow instalment tax provisions attracts penalties and interest.

This information product explains the instalment tax provisions in simple language that is easy to understand by tax students, tax teachers, tax professionals, tax advisors, and many others. There are also worked examples. Understanding the instalment tax will enable the reader comply with income tax provisions and save on penalties and interest.