Home Business News Employers and agents prepare for dual impact of retroactive taxes

Employers and agents prepare for dual impact of retroactive taxes

397
0

The decision by KRA to apply new taxes retroactively from July 1 has created challenges for tax agents as employers face double tax payments this month due to an earlier court suspension. Failure to remit the uncollected taxes within the designated five-day window may result in penalties. Commercial banks, who collected a significant portion of withholding tax, will be particularly affected. The Finance Act 2023 altered the withholding tax remittance deadline, further complicating matters.

The Kenya Bankers Association (KBA) is concerned about the new remittance window and increased compliance costs. However, the National Assembly has rejected engaging with KBA on this issue. Meanwhile, employers are struggling to implement the backdated deductions for housing levy and higher PAYE rates, leading to administrative and cash flow challenges.

KRA is providing new templates and guidelines to help employers adjust to the changes. The Court of Appeal recently lifted the suspension on the Finance Act 2023, prompting the resumption of tax implementation.