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Liability of
Individuals Payment
of tax by individuals (a) Salary or Wage Earners Salary or Wage Tax is deducted at source each fortnight from the employee's salary at rates that are set out in the fortnightly Salary or Wage Tax Tables. The tax deducted from fortnightly salary and wages is final tax and no refund is payable even if only one fortnight was worked during the year. Because the tax is final tax, salary and wage earners who do not have other income (eg. dividends, etc.) exceeding K100 do not have to lodge any form of tax returns. However, if an employee incurred expenses in earning salary or wage income, and the expenses exceed K200 in any fiscal year, the employee may claim a tax rebate calculated at 25% of the extent to which the expenses claimed exceed K200. For example, if expenses were K500 the employee would receive a refund of K60 (K300 x 25%). (b) Other Income of Individuals Persons whose income consists solely of earnings other than salary or wages are required to lodge an annual return of income by the 28th February next following the end of the fiscal year. Tax on the income in the return is calculated in accordance with the tax rates and in addition an equivalent amount of 'provisional tax' is raised which represents a prepayment of the next year's tax. An assessment notice is issued to the taxpayer advising the total amount of tax payable. Payment is due on the 30th September each year of the amount shown on the assessment notice (c) Taxpayers with combined incomes Taxpayers with both salary and wage income and other income(exceeding K100 per year) are required to lodge returns disclosing all income as in (b) above. In calculating tax, tax is assessed only on income other than Salary or Wages but at the marginal rates applicable to the combined income. Provisional tax is assessed on the other income and the tax is payable on the same basis as in the previous example. Note that there is no credit for the actual tax deducted from salary or wages even if the tax deducted was different to that calculated from the rates table in this example.
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