Breaking: State Increases Staff Welfare Benefits Tax to 30% - What You Need to Know
In a significant move, the state has tripled the staff welfare benefits tax to 30 percent, as outlined in the latest Finance Bill. This change is set to impact the taxable value of fringe benefits, including loans to employees. According to the Kenya Revenue Authority (KRA), the taxable value of fringe benefit tax is calculated as the difference between the market interest rate and the actual interest paid on the loan. This means that employees who receive loans from their employers at a lower interest rate than the market rate will be subject to a higher tax rate. The increased tax rate is expected to have significant implications for employee benefits and tax planning. With the new tax rate in effect, it's essential for individuals and businesses to review their tax strategies and consider seeking professional advice to minimize their tax liability. Key terms to consider include fringe benefit tax, employee benefits, and tax planning.
