What is Installment Tax?

· Installment tax is estimated income tax paid to KRA periodically, in anticipation of the tax payable for a year of income.

· Installment taxes are not payable by persons or businesses that are subject to Turnover Tax (TOT).

· Installment Tax is calculated in either of the two ways:

Prior year basis – Prior year tax payments are multiplied by one hundred and ten per cent (110%).

Current Year basis - In this method, especially for new business or those who were in losses and turned to profitability, installment tax is determined by estimating the current year profit and tax payable thereon.

· The installments are spread evenly at 25% of the tax due and payable on the 20th day of the 4th, 6th, 9th and 12th months of the year of income for all taxpayers expect those in the Agricultural Sector.

· Taxpayers in the Agricultural Sector pay in installments of 75% in the 9th month and 25% in the 12th month.