An email exchange between Jeff Nthautha and senior KRA officials on Tax amnesty guidelines for Kenyan Diaspora.
1. Whats the obligation for a person whose income in joint with a spouse who is not a Kenyan Citizen.
If the income is earned or accrued in Kenya or is deemed to have been earned or accrued in Kenya, then it is taxable and should be declared. Certain incomes though earned abroad are deemed to have been earned or accrued in Kenya – for instance where a person who is a resident earns employment income from another country or where one carries out a business partly in Kenya and partly outside Kenya.
2. If taxes have already been assessed by the foreign country, should the after- foreign-tax value/income be declared or the before-foreign-tax?
The entire income has to be declared. For employment income earned abroad, where taxes have been charged on that income in the foreign country, you will get a credit/relief for the taxes paid in that other country and therefore you do not suffer double taxation. Furthermore, where Kenya has signed a double tax avoidance treaty with another country, Kenyan residents will get a credit for taxes paid in that other country, which is a relief against double taxation.
3. What types of income are exempted from Kenyan Taxes or rather which ones are taxable?
The law provides for the taxation of the income of a person (resident or non resident) which was accrued in or derived from Kenya. These include: business income, employment income, rental income, dividends, interest e.t.c (please see Section 3 of the Income Tax Act). Certain incomes though earned abroad, as per the response to your first question, are deemed to have been accrued or derived in Kenya and will therefore be taxable if earned by a resident.
4. If a person has lost Kenyan citizenship and does not file for dual citizenship, how is such a person still liable?
Taxation is not based on citizenship but on residency. You are considered a resident if you have a permanent home in Kenya and/or are present in the country for a certain period in any year of income (January to December). A non-resident is also liable to tax if they have income accrued in or derived from Kenya.