The Kenya Revenue Authority (KRA) has issued a public notice, bringing significant changes to the Fringe Benefit Tax, Deemed Interest Rate, and Low Interest Benefit, impacting taxpayers in the first quarter of 2024.
In accordance with Section 12B of the Income Tax Act, the Market Interest Rate has been set at 15 per cent for January, February, and March 2024.
This rate serves as a crucial benchmark for various financial transactions within the specified period.
Under section 16(2)(ja) of the Income Tax Act, the prescribed rate of interest for deemed interest is also set at 15 per cent for the same period.
It is noteworthy that a withholding tax rate of 15 per cent on the deemed interest is mandated, with payment to the Commissioner due within five working days following the computation.
Additionally, in line with section 5(2A) of the Income Tax Act, the prescribed rate of interest for Low Interest Benefit stands at 14 per cent.
This rate is applicable for an extended period, covering the months of January through June 2024.
Taxpayers involved in transactions falling under this category should take note of the revised rate to ensure compliance with the tax regulations.
The adjustment in these rates showcases the government's commitment to maintaining a fair and transparent tax system, promoting compliance, and fostering economic stability.
Taxpayers are urged to review their financial transactions and seek professional advice to adapt to these changes effectively.
This timely public notice from the KRA serves as a pivotal update for businesses and individuals alike, emphasizing the importance of staying informed about evolving tax regulations and ensuring compliance to avoid any potential penalties.
As Kenya navigates the complexities of its tax landscape, these revisions mark a crucial moment for taxpayers to align their financial strategies with the updated rates and contribute to the nation's economic resilience.
The revised Fringe Benefit Tax rates, Deemed Interest Rate, and Low Interest Benefit underscore the dynamic nature of tax regulations, necessitating vigilance and proactive adaptation from taxpayers to stay in harmony with the evolving fiscal environment.