The government through the Ministry of Foreign Affairs has put diplomatic missions in Kenya on notice over failure to comply with tax policy on the remittance of income taxes for local staff.
According to the Ministry, some foreign missions have not been complying with the country's statutory requirement on remittance of income taxes.
"Organisations enjoying privileges are expected to facilitate payment of income tax for their local staff. Section 37(1) of the Income Tax Act, Chapter 470, Laws of Kenya," the Ministry noted in a communique sent on Wednesday, January 10.
“Given the above, the Ministry draws the kind attention of organisations not complying with the above requirement to register and start operating Pay As You Earn (PAYE) systems."
The Kenyan law on income tax remittance states that an employer paying emoluments to an employee shall deduct and remit stipulated tax.
Nonetheless, the government assured the organisations that penalties imposed on employers that fail to deduct and remit income tax would be waived.
“In addition, KRA has an ongoing tax amnesty on interest and penalties on tax debt which is open until June 30, 2024, and requests Missions to encourage their staff who are not paying income tax to take advantage of it,” Foreign Affairs Ministry noted in a statement.
“The Ministry advises organisations that choose not to register and operate PAYE schemes to engage reputable tax agents to handle income tax issues on their behalf."
Following the notice, non-compliance of the same could attract a fine of not less than Ksh10,000 but not exceeding Ksh200,000 or imprisonment for a term not exceeding 2 years or even both.
To file the income tax, the Ministry advised the diplomatic missions to make the remittance through the Kenya Revenue Authority (KRA) portal.
The government further urged organisations that choose not to register and operate Pay As You Earn schemes to engage reputable tax agents to handle income tax issues on their behalf.
"The following officials from KRA can be contacted for additional details and assistance on this matter," read a statement by the Foreign Affairs Ministry.
"Ministry of Foreign and Diaspora Affairs of the Republic of Kenya avails itself of this opportunity to renew to all organizations that have signed Host Country Agreements with the Government of the Republic of Kenya the assurances of its highest consideration."
