Withholding Tax is an advance payment of income tax that is deducted from specified payments. A person making the payment deducts the tax.
Nature of payment Rate Royalties 20% Rent
15% Supplies
to traders and institutions; 3% 3% Commission 20% Carriage
and haulage 10% Contractors/subcontractors 4% Public
entertainment 20% Casual
labour exceeding K15, 000 20% Services 20% Bank
interest exceeding K10, 000 20% Fees 10% Tobacco
sales 3%
For example, if a farmer sells
tobacco at the auction floors at a cost of K500, 000, he or she will be paid K485,
000, which is 3 percent less in line with payment for tobacco sales.
After making the deductions, the
operator should prepare a Withholding Tax Certificate in triplicate and remit
the tax to MRA within 14 days from the end of the month during which the
deduction was made.
Any individual, partnership, trust, association, company, club, statutory body, council, Government ministry or department or any religious organization, as long as it makes payments to any person, is eligible to register with MRA and operate Withholding Tax.
Withholding Tax is deducted using specified rates, according to the 14th Schedule to the Taxation Act, as follows:
USD - 743.06
GBP - 932.89 
ZAR - 50.79 
EUR - 822.42
CAD - 561.69 
JPY - 6.89 
AUD - 510.94
