“If you don’t know about taxes you will pay when others aren’t paying.” – Joe Mutuku.

As a consultant, you are running your own business and are working on a contractual basis for numerous clients or/and employers. Unlike an employed person whose tax responsibility may only be one, consultants may have more than one tax responsibility.

How do you file your taxes as a consultant in Kenya? We are here to make it seamless with less headaches including a step by step guide.

First, in Kenya, the deadline for filing your taxes is the 30th of June every year. The earlier you file your taxes, the less the headache and confusion that comes with the last-minute rush.

Second, it’s important to know that as a consultant you pay withholding tax. This means, after an agreement when the consultant issues an invoice to the client for payment the client will withhold five percent of the payment. This goes to the Kenya Revenue Authority (KRA) and the ninety five percent goes to the consultant. After the client makes the payment to the Kenya Revenue Authority, the consultant will get a payment notification through the email they used to apply for their employee pin number.
As a consultant, it’s your responsibility to collect these payment notifications from the Kenya Revenue Authority during the Tax period for filing including the invoices that you have sent to your client.

Third, when it comes to the filing process, it is different for the PAYE. You will file your taxes like a company filing in the profit and loss sections and the balance sheet. All the ninety five percent of income you have received you will add as income for the year. Then add the expenses which were incurred in running your consultancy business. The key is to not underestimate the total income you have received.

Fourth, it’s important to keep your files in order just in case you are requested to give proof of your sources of income.

 

Step by step guide!

Step 1: Open your browser and go to https://itax.kra.go.ke/KRA-Portal/ and enter your KRA PIN and password and click Continue.

Step 2: Click on the “Returns”Tab

 

Step 3: Click on “File Returns” and select Income Tax - Resident Individual.

 

Step 4: Download the Income Tax - Resident Individual form in either the Excel/ODS Template using the link provided.

 

Step 5: Convert the downloaded file to an editable version depending on your software.

 

Step 6: Fill out your details under basic information, answer the questions asked appropriately and Click ‘Next’. Tip: Click on Yes on the “Do you have any income other than employment income?” section.

 

Step 7: Go the Employment Income Tab and add the details of the employers is any

 

step 8: Go to the details of the PAYE deducted tab is the information from the employer is available

 

Step 9: Go to the next Tab and fill out the Profit_Loss Account section under consultancy fees.

Step 10: Go the Balance Sheet tab and ensure the numbers are balanced. Tip:

Step 11: Go to the Tax Compilation tab and validate the document. Once validated. Go back to the itax website and upload the zip. file

And you are done!