KRA calls out employers denying PWDs tax reliefs for disability
Times Tower, the Kenya Revenue Authority's head office in Nairobi. PWDs can apply for an income tax exemption certificate from KRA to lower their tax burden.
What you need to know:
- Affected workers are losing up to Sh36,700 per month or Sh440,400 annually due to the non-compliance of their employers.
- A 2010 regulation allow PWDs to apply for an income tax exemption certificate from KRA to lower their tax burden.
The Kenya Revenue Authority (KRA) has called out some employers for illegally denying their workers tens of thousands of shillings in monthly tax reliefs for disability as provided in law.
The taxman says it has noticed that some employees are not complying with the Persons with Disabilities(PWDs) (Income Tax Deductions and Exemptions) Order, 2010, (Legal Notice No. 36 of 2010), which allows registered PWDs to enjoy income tax exemption on up to Sh150,000 monthly earnings.
“KRA has noted that some employers are still deducting Pay as You Earn from PWDs who have valid income tax exemption certificates without giving relief of the exempt amounts as provided above,” said KRA in a notice.
The affected workers are losing up to Sh36,700 per month or Sh440,400 annually due to the non-compliance of their employers.
The 2010 regulations allow PWDs to register with the National Council for Persons with Disabilities and then apply for an income tax exemption certificate from KRA to lower their tax burden.
KRA has asked all the PWDs who have been impacted by the erroneous deductions to apply for refunds when filing their annual tax returns. The taxman is also extending this privilege to retired PWDs, who have suffered a similar problem.
“PWD who have retired from employment and whose lump sum payments have been subjected to tax despite holding valid tax exemption certificates, are advised to apply for a refund of tax erroneously deducted through i-Tax system and to attach the supporting documents,” said the KRA.
The taxman has further directed employed PWDs who have not presented their income tax exemption certificates to their employers to do so to start enjoying the benefit.
Employers are usually required to authenticate the validity of the exemption certificate using the exemption checker on the KRA i-Tax portal before effecting the tax exemption in the payroll.
“PWDs with other sources of income, are encouraged to factor in the tax exemption details when filing their annual tax returns,” said the KRA.
