KRA Lowers Rates on Fringe Benefits Tax, Deemed Interest Rate and Low-Interest Benefit

The Kenya Revenue Authority (KRA) has announced new tax rates for the Fringe Benefits Tax, Deemed Interest Rate and Low-Interest Benefit.

The revenue authority in a statement on Friday, January 17, revealed that it had lowered rates on Fringe Benefits Tax, Deemed Interest Rate to 13 per cent from 16 per cent.

Similarly, KRA announced that it had lowered the Low-Interest Benefit by two per cent from 16 per cent to 14 per cent.  Fringe Benefit Tax is payable by every employer in respect of a loan provided to an employee, at an interest rate lower than the market rate.

It is provided under section 12B of the Income Tax Act, which became effective on June 12, 1998 and is derived from the difference between the market interest rate and the actual interest paid on the loan.