The Kenya Revenue Authority (KRA) has announced the latest developments in Fringe Benefit Tax, effective for the months of January, February, and March 2024.
According to the statement released by the KRA, the Market Interest Rate for the purposes of Section 12B of the Income Tax Act has been set at 15%.
This rate will be apply to relevant transactions during the specified months.
The Deemed Interest Rate, as per section 16(2)(ja) of the Income Tax Act, is also fixed at 15% for the same period.
The Authority further advised that a withholding tax rate of 15% on the deemed interest is mandatory, and the amount should be deducted and remitted to the Commissioner within five working days following the computation.
Moreover, the KRA has introduced a Low Interest Benefit category, specifying a prescribed interest rate of 14% under section 5(2A). This reduced rate is applicable for a longer duration, covering the months of January through June 2024.