Thread by @RookieKE

As you grab your lunch, tune in to our Twitter chat, and ask questions about how you can legally reduce your tax burden. I will have our tax experts @ushuru_co_ke online for this.

Heeeeey guuuuuys! Welcome to my channel!
Seriously though, it is tax season, and I would like us to chat for a bit about how to manage our taxes.
#FileWithUshuru

To start off, let me make it clear, that tax management is not Tax Evasion. Tax Evasion is illegal and we want nothing to do with that. We want to Avoid paying more tax than we should #FileWithUshuru

First off, I am an accountant by training but hardly a tax expert, and that's why @ushuru_co_ke is at hand to answer questions and correct me where I present outdated information. #FileWithUshuru

Why am I doing this with @ushuru_co_ke ? Because they are doing taxes differently. First they are fully online ( ushuru.co.ke ), and they are on our side as taxpayers. They are focused on educating us, and that I love. #FileWithUshuru

The structure of this chat:
I'll share 7 ways you can reduce the taxes you pay legally, and then we go to Q&A.

And this is for employed folk. People on a salary. For the business folk, don't tense, we have a chat for you cooking #FileWithUshuru

1. The first and the easiest, is Personal Relief. This is for all employed taxpayers and should be applied by your employer BEFORE they pay you. Last year it was KES 1,280 p.m and this year it is KES 1,408 PM #FileWithUshuru

Generally, most employers know to apply personal relief, but if you are working with a young or an informal business (you know those ones where the boss pays you out of their personal account), double check your payslip. #FileWithUshuru

2. Insurance relief. If you are paying life insurance, medical insurance, or education insurance, you qualify for this. The tax man gives you a relief of 15% of the premiums you pay to a maximum of 5,000 bob per month #FileWithUshuru

How to claim the relief? Ask your insurance company/companies to issue you with a relief card showing your name, type of policy, premiums payable and other such details. Give it to your employer, and follow up to make sure they deduct #FileWithUshuru

I bet many of us pay medical insurance but have never gotten insurance relief for it. Please rectify that today / this financial year. #FileWithUshuru

3. Pension contributions. Any money you contribute to a registered pension scheme (one that is registered with @RBA_Kenya ) is tax exempt, to a max of KES 20,000 per month. I will spend some time here. #FileWithUshuru

You know how we say you should pay yourself before paying anyone else? Pension contributions are truly that. By contributing to one, you are paying yourself EVEN BEFORE PAYING THE TAX MAN! #FileWithUshuru

What do I mean? If your gross pay is 100k, and you contribute 20k for pension, the tax man will start taxing you at 80k. #FileWithUshuru

Now, many of us are in jobs where the employer has a matching pension scheme. Where they pay a certain percentage for you. These things tend to be optional, so we do not join them. Or we procrastinate indefinitely.

Problem is, we are literally leaving money on the table.
1. The matching our employer would do (which is like someone giving you free cash); and
2. The tax savings.
Don't be that person who refuses money #FileWithUshuru

4. Tax-free remuneration (yes, this exists). If you receive the following pay:
a) A daily per diem not exceeding KES 2,000
b) Bonuses, overtime pay, and retirement benefits if you are in the lowest tax band (KES 12,298.33 p.m). Those of us who have helpers, please note.

c) Meals your employer provides you, where the value does not exceed KES 4,000 per month.
The above 3 benefits/types of pay are not taxable #FileWithUshuru

5. Do you have a mortgage funded by a bank, insurance company, NHC or a building society?
Interest you pay on this mortgage is allowed as a tax deduction to a max of 25k per month. #FileWithUshuru

HOWEVER, this has to be for the home you live in. If you live in it only for part of the year, then the allowable deduction will be limited to the period when you lived there. #FileWithUshuru

6. If you are a person living with disability. Please register with National Council for People with Disability (NCPWD) and KRA, and the first 150k of your salary will be tax-free. Please share this widely. #FileWithUshuru

7. If you have income from Canada, India, Denmark, Iran, France, Germany, South Korea, Norway, Qatar, South Africa, Sweden, UAE, UK, Zambia and Singapore. This is for you #FileWithUshuru

Kenya has double tax agreements with these countries, which means if they have already taxed your income, the tax credit will be recognized by KRA, and they won't tax you. #FileWithUshuru

I want to add some tweets from @ushuru_co_ke onto the thread, then we can go to the Q&A

About insurance relief. You can claim for prior years.

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More on insurance relief

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Please confirm on your P9 that this rate has been applied

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Told you guys. I am rusty. My attempt at jargon failed 😂😂😂 basically

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Onto the questions.
Q1. Under which conditions can one get a waiver on the penalty charged for not filing returns? Say they missed last year. @ushuru_co_ke #FileWithUshuru

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Thanks @ushuru_co_ke
Q2. How is the personal relief calculated? Yearly or from the time your employer starts submitting returns (PAYE) #FileWithUshuru

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#FileWithUshuru

Q3. If your are owed by KRA a refund, can you of-set the refund from your penalty? @ushuru_co_ke #FileWithUshuru

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Q4 via @Madame_Smelly
a) Are you sure about insurance relief for medical insurance?
b) If you have part time work & have paid withholding tax, do you file it as employment income, or business income? @ushuru_co_ke #FileWithUshuru

Medical insurance premiums are eligible for insurance relief!

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Ok guys. That's the end of our extended lunchtime Twitter chat. Why do I do these chats? Because we want to be money smart in all respects. That is what the #52WeekChallenge is all about.

We are approaching the end of month 6 on the #52WeekChallenge I hope we are all keeping up. And it is not too late to start! This is the best thing you can do this year
rookie-manager.com/52weekchalleng…

Finally I want to thank @ushuru_co_ke for joining me today. This is the first of 4 chats I hope to have with them about being tax smart. Please keep sending them questions #FileWithUshuru

Also go to their site ushuru.co.ke they are making tax filing pain-free at very pocket friendly rates

Don't wait till the last minute, don't stress. @ushuru_co_ke is online and they do the work for you #FileWithUshuru

Thank you so much guys for watching...sorry FOLLOWING the chat, for asking questions and RTs