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Originally published by Kenyanstop
January 27, 2026
9h ago
What Withholding Tax Means, How It Works, and Why Many Get It Wrong
KRA has disclosed it is pursuing more than 392,000 taxpayers following a cleanup of its Withholding Tax ledger, involving an estimated Ksh759.7 billion in under-declared taxes...
✨ Key Highlights
Withholding Tax (WHT) is often misunderstood in Kenya, with many taxpayers incorrectly assuming their tax obligations end once tax is deducted at source. The Kenya Revenue Authority (KRA) uses WHT as an advance collection method, requiring payers to deduct and remit tax on behalf of income earners for various streams like professional fees, royalties, and interest.
- WHT rates vary, with professional fees for residents typically at 5 per cent, while non-residents face 20 per cent.
- The responsibility for deducting and remitting WHT lies with the payer; failure to do so incurs a penalty of 5 per cent of the tax due, plus 1 per cent interest per month.
- For most resident taxpayers, WHT is an advance tax credit to be claimed during annual return filings on iTax, rather than a final tax.
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