Tax Alert No. 2 : Guidelines on minimum tax

Tax Alert No. 2 : Guidelines on minimum tax

Tax Alert

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Tax Alert

Background

Further to our alert on the Kenya Revenue Authority (KRA) Minimum Tax Guidelines which we circulated on 4 February 2021 (KPMG Summary: Minimum Tax Guidelines), the KRA has updated their earlier guidelines to provide further clarity on the implementation of Minimum Tax. The new guidelines make changes to the definition of gross turnover, provide clarity on transition for persons whose accounting period ends on a date other than 31st December and the computation of Minimum Tax for partnerships.

We have summarised the changes here.

Our opinion

The guidelines provide clarity on the implementation of Minimum Tax, whose introduction and subsequent preliminary guidelines left many questions unanswered.

It is now clear that one can adjust the Minimum Tax payable with Withholding Tax, Advance Tax or Digital Service Tax that they have paid for the period. The clarification on the application of Minimum Tax to persons with non-December year ends is also welcome.

If you have specific questions on the implications of Minimum Tax to your business, please reach out to us.

 

Click here to read more on the alert.

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