How to Apply for a Advance Tax in Kenya

What is advance Tax? This is a tax paid in advance before a public service vehicle or commercial vehicle is licensed at the rates applicable. What is advance tax and who should pay? Taxpayers are sometimes expected to make advance payments ahead of licensing of their commercial or public service vehicles subject to standard rates. The option comes with a fixed payment scale for different types of automobiles based on KRA categorization. It is a requirement that one can only file advance returns by first applying online or visiting the nearest KRA office for registration. Learning how to pay advance tax on iTax Kenya has never been any easier than now. Apply for a Advance Tax

What are the tax rates for advance tax?

• For vans, pick-ups, trucks, prime movers, trailers and lorries; Kshs. 1,500 per ton of load capacity subject to a minimum of Kshs. 2,400 per year of income;

• For saloons, station-wagons, mini-buses, buses and coaches; Kshs. 60 per passenger capacity per month subject to a minimum of Kshs. 2,400 per year of income.

Is advance tax a final tax?

Advance tax is not a final tax. Individuals who have paid any advance tax are required to declare the same in their individual income tax returns submitted yearly and pay any additional tax due. Apply for a Advance Tax

When is it due?

It is due on 20th of January or before transfer of ownership of vehicle. Apply for a Advance Tax

Procedure

Apply On-line

Step 1: Get started by logging in to Kenya Revenue Authority Portal

• Go to KRA online tax portal : KRA online tax portal and log in.
• Enter KRA PIN then click continue.
• Enter password and security stamp to login to your KRA account.
  

Step 2: Payment registration

• Click on the payment icon and select payment registration
  

Step 3: Select payment obligation and tax period

• Under tax head icon select (income tax)
• Under the tax sub head icon select (Advance tax)
• Under Payments type icon select ( self-assessment tax)
• Select tax period you want to pay (e.g. Jan 2019 to Dec 2019)
• Choose the mode of payment (cash /cheque/ RTGS)
  

Step 4: Download the payment slip and make payment

• After making the selections above click submit to download a payment slip
• Proceed to make payment using payment slip. Apply for a Advance Tax
  

Apply In-Person:

1. Go to the Office of General Directorate of Taxes at the Kenya Revenue Authority. To make the application.
2. Bring and present the required documents to the revenue officer. These documents include Apply for a Advance Tax
   i. A copy of certificate of incorporation.
   ii. Vehicle log book.
   iii. Vehicle Tax Clearance Certificates.
   iv. Letter of application for registration Advance Tax,
   v. Invoice (importation papers)
   vi. Personal Identification Number (PIN),
   vii. PSV licence.
3. You will be given an advance tax application form to fill. The tax revenue officer will assess the application and determine the advance tax payable.
4. The revenue officer will direct you to the cashier to pay the application fee and Advance tax for registering your public service vehicle.
5. After payment to the advance tax you will be issued with an advance tax certificate.

Required Documents

• A copy of certificate of incorporation.
• Vehicle log book.
• Vehicle Tax Clearance Certificates.
• Letter of application for registration Advance Tax.
• Invoice (importation papers)
• Personal Identification Number (PIN)
• PSV licence.
  

Office Locations & Contacts

Kenya Revenue Authority- Head Office

Times Tower, 19th Floor, Haile Selassie Avenue

P.O. Box 30742 Tel. 310900, Fax 315987 Nairobi, Kenya.

Tel: 2813068 , 2813160 , 2812011.

Fax: 253532,240929 ,Nairobi Kenya.

Email: callcentre@kra.go.ke

Website: Kenya Revenue Authority

KRA onlne tax portal : KRA onlne tax portal

KRA Call Centre

Tel: +254 (020) 4999 999/ 4998 000

Cell: +254 (0711) 099 999

Email: callcentre@kra.go.ke

KRA Offices : KRA Offices

Eligibility

All Kenyan Vehicles for public service and commercial service are entitled to advance tax.

Fees

The current rates (wef 14.06.2001) are:
i. For load carrying vehicles – vans, pick-ups, trucks and Lorries:-

• Kenya shillings one thousand five hundred (1500) per ton load capacity per year, or
• Kenya shillings two thousand four hundred (2400) per year,

Whichever is the higher.
ii. For passenger carrying vehicles – saloons, station wagons, minibuses, buses and coaches:-

• Kenya shillings sixty (60) per passenger capacity per month, or
• Kenya shillings two thousand four hundred (2400) per year,

Whichever is the higher.
iii. For drivers Ksh3,600 per year
iv. For conductors Ksh 1,200 per year

Validity

• Valid for 1 year.

Processing Time

• The processing time is 14 days.

Instructions

1. The owners of public service vehicles like Matatus must register for an advance which should be paid in advance before a vehicle is registered or licensed in Kenya.
2. Mode of payment.
   • The Commissioner is empowered to prescribe the conditions and procedures governing the payment of Advance Tax.
   • Currently, the tax is paid at the time of obtaining the PSV license (in the case of conductors and drivers) and at the time of booking for inspection (in the case of commercial vehicle).
   • Payments are made at all KRA offices where PSV licenses are issued and from designated Domestic Taxes Department offices.
   • Where the receiving office is not computerized, a manual receipt is issued and the vehicle owner should give all his particulars
   i. Full names,
   ii. Personal Identification Number (PIN),
   iii. Vehicle registration number
   iv. Physical and postal address to facilitate issuance of a computerized receipt.
   This should be received by the vehicle owner within a short period.
3. End-Of-Year procedure for vehicle owners:
   • As the name implies, Advance Tax is a personal tax liability paid in advance.
   • The vehicle owner should claim a deduction in respect of the amount paid in any year when submitting tax returns (self-assessment returns) for that year.
   • The amount so claimed shall be set-off against the years’ tax liability and where there is nil tax liability, an appropriate refund will be made, subject to the satisfaction of the Commissioner that the refund is correctly due.
4. Public institutions and exempt organizations
   • No Advance Tax is payable in respect of commercial vehicles that are registered in the names of Public Institutions (e.g. Public schools, Government Ministries etc.) and organizations that are exempt from tax.
   • However, such bodies must produce appropriate evidence of their status to the Commissioner for Authority not to pay the Advance Tax.
     

Required Information

• Name of Taxpayer
• Taxpayer Identification Number
• Company PIN
• Business Name or Trade Name of Taxpayer
• Bank Details
• Name of Bank
• Bank branch
• Account Number
• Type of Employment
• Total Income Chargeable Income Total Tax Payable
• Details of Salary paid and Person relief tax deducted from Employees
• Vehicle registration number
• Physical and postal address

Need for the Document

• This is a tax paid in advance before a public service vehicle or commercial vehicle is licensed at the rates applicable.
  

Information which might help

• Section 12A of the Income Tax Act (Cap 470) was introduced by the Finance Act. 1995, and came into force with effect from 1st January 1996. It provided for the payment of a tax ‘to be known as Advance Tax’, in respect of commercial vehicles that are licensed to operate on Kenyan roads.

A Commercial Vehicle is a road vehicle which is:-
i. Manufactured for the carriage of goods and so used in connection with a trade or business; or
ii. A motor omnibus as defined in the Traffic Act; or
iii. Used for the carriage of members of the public for hire or reward.
This includes such road vehicles as vans, pick-ups, trucks, Lorries, station wagons, minibuses, buses, and coaches.

• This is a tax paid in advance before a public service vehicle or commercial vehicle is licensed at the rates applicable.
• The tax rates for advance tax are as follows

i. For vans, pick-ups, trucks, prime movers, trailers and lorries; Kshs. 1,500 per ton of load capacity subject to a minimum of Kshs. 2,400 per year of income.
ii. For saloons, station-wagons, mini-buses, buses and coaches; Kshs. 60 per passenger capacity per month subject to a minimum of Kshs. 2,400 per year of income.

• Advance tax is not a final tax. Individuals who have paid any advance tax are required to declare the same in their individual income tax returns submitted yearly and pay any additional tax due.
  

Other uses of the Document/Certificate

• Advance tax is a Tax applicable to Matatus and other Public Service Vehicles. It is not a final tax, but a tax partly paid in advance before a public service vehicle or a commercial vehicle is registered or licensed.
• Advance Tax was introduced specifically to bring owners of public service vehicles and commercial vehicle into Tax Net. The rates are varied each year by the Minister of Finance during the Budget speech. This tax has been into force since 2003.
  

External Links

Advance Tax : Advance Tax in Kenya

Others

• Section 12A of the Income Tax Act (Cap 470) was introduced by the Finance Act. 1995, and came into force with effect from 1st January 1996. It provided for the payment of a tax ‘to be known as Advance Tax’, in respect of commercial vehicles that are licensed to operate on Kenyan roads.
• Advance tax means income tax should be paid in advance instead of lump sum payment at year end. It is also known as pay as you earn tax.
• These payments have to be made in instalments as per due dates provided by the income tax department.