The Kenya Revenue Authority (KRA) has issued taxpayers’ guidelines on the steps required when seeking Individual tax refunds.
A tax refund is reimbursement of excess tax paid in a given period. Upon filing an individual income tax return, a tax refund may arise from Insurance policies on life and education that have not been granted relief by the employer.
Those who qualify for tax refunds
One having a mortgage from a specific financial institution (as listed on the 4th schedule on Income Tax Act), and has not been granted relief by the employer on the same, is also entitled to a tax refund.
“A resident who was not granted personal relief during 2020 if tax deducted at source was paid more than a final liability, also qualifies for a tax refund, said KRA in a notice to taxpayers.
Taxpayers can apply for a tax refund within five years from the date on which tax was paid.
VAT Refunds
In May this year, KRA began paying out KSh. 10 billion in Value Added Tax (VAT) refunds following a directive and release of National Treasury funds. The refunds were aimed at offering financial relief to businesses worst hit by the COVID-19 pandemic.
On March 25, 2020, President Uhuru Kenyatta ordered the National Treasury to reduce VAT from 16% to 14%. These measures are to revert in February 2021.
He also directed the Kenya Revenue Authority to expedite the payment of all verified VAT refund claims amounting to KSh10 Billion and allow for offsetting of withholding VAT to improve cash flows for businesses.
The Head of State also directed that a 100% tax relief be given to individuals earning a monthly salary of up to KSh24 000, as part of measures announced to cushion Kenyans against the coronavirus’s impact pandemic.
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