CHAPTER FOUR
INCOME TAX IN KENYA
OBJECTIVES
By the end of the topic the student should be able to:
Explain how tax is administered in Kenya
Define the year of income, and its importance
State the various sources of each type of income
State the income taxable in Kenya
Explain the meaning and importance of Residence and Resident persons
4.1 KRA AND ITS FUNCTIONS
The Kenya Revenue Authority (KRA) was established by an Act of Parliament, Chapter 469 of
the laws of Kenya , which became effective on 1st July 1995 . The Authority is charged with the
responsibility of collecting revenue on behalf of the Government of Kenya.
A Board of Directors, consisting of both public and private sector experts, makes policy
decisions to be implemented by KRA Management. The Chairman of the Board is appointed by
the President of the Republic of Kenya .The Chief Executive of the Authority is the
Commissioner General who is appointed by the Minister for Finance.
4.1.1 PURPOSE OF KRA
Assessment, Collection, Administration and Enforcement of laws relating to revenue.
In terms of revenue collection and other support functions, the Authority is divided into the
following Departments:
Customs Services Department
Domestic Taxes Department
i). Domestic Revenue
ii). Large Taxpayers Office
Support Services Department
Investigations & Enforcement Department
Each Department is headed by a Commissioner.
4.1.2 Role of KRA in the economy
To administer and to enforce written laws or specified provisions of written laws
pertaining to assessment, collection and accounting for all revenues in accordance with
these laws.
INCOME TAX IN KENYA
OBJECTIVES
By the end of the topic the student should be able to:
Explain how tax is administered in Kenya
Define the year of income, and its importance
State the various sources of each type of income
State the income taxable in Kenya
Explain the meaning and importance of Residence and Resident persons
4.1 KRA AND ITS FUNCTIONS
The Kenya Revenue Authority (KRA) was established by an Act of Parliament, Chapter 469 of
the laws of Kenya , which became effective on 1st July 1995 . The Authority is charged with the
responsibility of collecting revenue on behalf of the Government of Kenya.
A Board of Directors, consisting of both public and private sector experts, makes policy
decisions to be implemented by KRA Management. The Chairman of the Board is appointed by
the President of the Republic of Kenya .The Chief Executive of the Authority is the
Commissioner General who is appointed by the Minister for Finance.
4.1.1 PURPOSE OF KRA
Assessment, Collection, Administration and Enforcement of laws relating to revenue.
In terms of revenue collection and other support functions, the Authority is divided into the
following Departments:
Customs Services Department
Domestic Taxes Department
i). Domestic Revenue
ii). Large Taxpayers Office
Support Services Department
Investigations & Enforcement Department
Each Department is headed by a Commissioner.
4.1.2 Role of KRA in the economy
To administer and to enforce written laws or specified provisions of written laws
pertaining to assessment, collection and accounting for all revenues in accordance with
these laws.
