KRA Calls Attention to Employers Denying Disability Tax Reliefs to PWDs

March 13, 2024
Kenya Revenue Authority (KRA) headquarters, Times Tower, Nairobi.

The Kenya Revenue Authority (KRA) has cautioned employers against unlawfully withholding monthly tax reliefs for disability from their workers as mandated by the law.

KRA notes that some employees are not adhering to the Persons with Disabilities (PWDs) (Income Tax Deductions and Exemptions) Order, 2010 (Legal Notice No. 36 of 2010), which grants registered PWDs income tax exemption on earnings up to Sh150,000 per month.

“KRA has noted that some employers are still deducting Pay as You Earn from PWDs who have valid income tax exemption certificates without giving relief of the exempt amounts as provided above,” the taxman said in a notice.

Non-compliance by employers is causing the affected workers to lose up to Kes.36,700 per month or Kes.440,400 annually, the Business Daily reports.

Under the 2010 regulations, PWDs can register with the National Council for Persons with Disabilities and apply for an income tax exemption certificate from KRA to reduce their tax burden.

PWDs Urged to Apply fr Refunds

KRA has further urged all affected PWDs, who have experienced incorrect deductions, to apply for refunds when completing their annual tax returns. This privilege is also being extended to retired PWDs who have encountered similar issues.

“PWD who have retired from employment and whose lump sum payments have been subjected to tax despite holding valid tax exemption certificates, are advised to apply for a refund of tax erroneously deducted through i-Tax system and to attach the supporting documents,” said the taxman.

The tax authority has also instructed employed PWDs who have not provided their income tax exemption certificates to their employers to do so to begin benefiting from the exemption.

Employers are typically mandated to verify the validity of the exemption certificate using the exemption checker on the KRA i-Tax portal before implementing the tax exemption in the payroll.

“PWDs with other sources of income, are encouraged to factor in the tax exemption details when filing their annual tax returns,” said the KRA.

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