Breaking News: KRA raises fringe benefit tax rate on loans for Kenyan Employees.
Breaking News: KRA raises fringe benefit tax rate on loans for Kenyan Employees: In a notice on January 23, KRA announced that it was raising the Fringe Benefit Tax rate from 13 to 15 per cent and the new rates will take effect for the first three months of 2024
Fringe Tax is usually paid by employers for every loan they offer their staff. Usually, the loans offered at a place of work have a lower interest rate as compared to other financial institutions such as banks.
The notice read,”For the purposes of Section 12B of the Income Tax Act, the Market Interest Rate is 15%. This rate shall be applicable for the months of January, February and March 2024.”
“Fringe benefits tax is charged on the taxable value of a fringe benefit provided by an employer in a month and is due and payable on or before the 9th of the following month,” they added.
In as much as the tax targets the employers only, they may be forced to increase the interest rate for loans they give at their workplaces.
Which means, loans given at work place will be more expensive as compared to previous months or seasons.
KRA stated,”For purposes of section 16(2) (a) of the Income Tax Act, the prescribed rate of interest is 15%. This rate shall be applicable for the months of January, February and March 2024.”
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