Hello mbirrioneas,
I’m not in formal employment but I got a side hustle for which I got one withholding tax certificate last year. How do I file the return for this certificate? I have downloaded the individual resident return form. Under the basic info tab, I’ve selected the ‘do you have any income other than employment income’ option. After that I dunno what to do.
Is there anyone who can assist?
Call KRA customer care they will take u through the process…Before you make that call ensure the excel sheet is open so that you fill in as necessary.
In the P & L, have the gross income, deduct any expenses you incurred, have your final profit /loss. In balance sheet section put 1 in liability side and 1 in asset side. Put the withheld tax in line 13.4( Tax computation section).
For each column you have a figure, ensure the row has zeros under the other income/expense.
Thanks for the quick reply. Question - will it matter if I fill the P&L using the ‘other’ column (my side hustle is not registered). Also for the balance sheet section, do you literally mean inputting ‘1’?
Never do that , hao washenzi walini tupisha mbao wakaniweka category ma mbirrrionares , I’m stuck , tafuta mtu anajuwa what he is doing to take you through the process pole pole , wish hata ninge file NIL !!!
Jaza iyo figure iyo place itaitisha
You can fill the ‘other’.
For the balance sheet just literally key in 1. Else, you wont be able to upload it.
You can amend it to reflect the correct position if you have adequate documentation to prove your case.
Jaza NIL…otherwise utakuwa unapea kenyatta family your hard earned cash
Huwezi file nil kama una withholding tax kwa ledger yako omwami.
Bah, now I’ve got another problem. I’ve jazad the excel file, but I have no details to add on ‘the sources of income’ field on itax. I’m not employed, I don’t have rental income, and I’m not paid by any business (so no business income).
Tried nika pata hii " The below mentioned Amendment Application made by you has been rejected. " Will keep trying otherwise mta niona na hoodi kortini ! Ati nime ficha birrions
I have registered a new business.(not limited liability). Do i need to apply for a new PIN independent of my existing PIN?
I want to use the company to sign contracts with various contracts and earn commissions too.
I also need to be in good books with KRA.
No need for new PIN for a Business Name (Sole Proprietorship). You just use your personal PIN and file as additional income for 2018 in case you transacted.
Let us understand what Withholding Tax is, before going ahead to account for it. If you are an architect and charged your client Kshs. 100,000. the client is expected to withhold 5% of this and pay it directly to KRA and pay you the balance (Kshs. 95,000). This withheld amount Kshs 5,000 is actually credited into your account since it has already been received by KRA. You then need to declare that you earned 100,000 to KRA as other income Compute taxes on this as you would have done anyway… Then if the tax due was Kshs, 20,000, you will be required to declare that 5,000 was withheld and the final tax payable from the template will be 20,000-5,000=Kshs. 15,000. You cannot do NIL since there is an already existing declaration of Kshs 100,000 pre-declared income. Actually you cannot declare total gross income of less than Kshs.100,000 and if you do the system will flag you and you will asked to meet Njiraini!!
Intereresting.Thankyou!
So how am i supposed to calculate theis other tax tax that was not withheld? As PAYE, VAT, Profit or how? At what rate?
Forgive my ignorance…
Wadau ingieni their FB page/You tube…there is plenty to learn from those Waya-hoodies KRAss of 2019
It all depends on how you were trading… This is not PAYE because it is not salary income. It is also not VAT (This is a completely different story). It will be a profit computed from the excel spreadsheet where you are allowed to enter allowable expenses incurred while offering this service. For example if you are an architect, you spent cash on printing the drawings, transport costs to the site and other regulatory agencies for approvals. This will be entered as expenses on the spreadsheet. Now, if you offer professional services that attract a VAT of 16%, you are expected to charge this to the client and file and pay to KRA for the month you invoiced the client and you do not need to account for it during income tax computations at the end of the year. Since you are filing under your personal PIN, this will be computed at the same rate as PAYE. (Graduated scale). The only difference between it and PAYE is that you are allowed to deduct some allowable expenses before coming up with the gross income which will now be subjected to taxation. PAYE allows you clearly defined allowable expenses, e.g. pension deposited in a registered pension scheme, mortgage (and this has an annual ceiling).
I believe that you already know one accountant, so it would be good advice to speak with him about this issue, instead for searching the answer to such a serious question on this forum. Taxes are not a game and you should do everything properly