How To Avoid Taxes Legally in Kenya


You can avoid tax, evade tax or pay tax. Although some reliefs are little, it doesn't make sense to leave money that you can have and use it for other meaningful investments. Here are some ways to avoid paying tax legally :

If you can get a mortgage, and buy a house you are liable to tax deduction per year that your mortgage would have earned. This goes up to Ksh.300,000 per year which translates to Ksh.25,000 every month. This is a lot of money in a year which you can invest.

Saving your pension with a good pension scheme in Kenya that is legally registered. The government is encouraging people to save for retirement by giving tax relief. This is up to Ksh.20,000 per month depending on how much you earn.

The house ownership savings plan. This is saving to buy a house or own a home. The government is encouraging people to be homeowners and so according to the law, the state is obligated to offer tax relief. You can reduce your taxable income by up to Ksh.4000 a month to save and own a home.

If you have a Life insurance or Education policy, the government gives up to 15% of the premium you are paying for that insurance. The cap is Ksh.5000 per month

The disability relief aimed at helping the disabled manage living in society. If you fall under this group it is your responsibility to go to Kenya Revenue Authority and notify them. This is for those who earn less than ksh.150,000 per month

Tax-free Investments Vehicle. When investing, it’s important to invest in a tax-efficient vehicle. These options include infrastructure bonds. This is when the government wants to invest in infrastructure and so invites people to buy bonds. The returns are not taxed unlike treasury bonds or cooperate bonds.Having a fixed deposit account in Post Bank. Post bank is not regulated by the Central Bank of Kenya but by the Kenya Post Office Savings and so they don't pay tax on Certificate of Deposits.

Which method are you comfortable to use when avoiding tax legally?

Follow me for exciting articles like this.