Accounting and Tax FAQs in Kenya: #1 Best Expert Answers

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Your Ultimate Guide to Accounting and Tax FAQs in Kenya

Navigating corporate finance and statutory compliance can raise complex questions for business owners. To help you make highly informed, strategic decisions, we have compiled the most comprehensive Accounting and Tax FAQs in Kenya. Whether you are a startup founder looking for guidance on initial registrations or a seasoned executive managing complex payroll structures, understanding local regulations is critical for your success.

Below, the certified experts at Alkam & Mulila LLP answer your top questions regarding our comprehensive accounting, audit, tax advisory, and corporate governance services. We continuously update these Accounting and Tax FAQs in Kenya to reflect the latest legal frameworks and statutory updates

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Why is professional bookkeeping so critical for my business?

Accurate bookkeeping is the foundation of any successful enterprise. One of the most common questions in our Accounting and Tax FAQs in Kenya revolves around basic record-keeping. Professional bookkeeping ensures your daily cash flow is tracked, prevents financial mismanagement, and ensures your ledgers are perfectly prepared for end-of-year statutory audits.

Can I handle my own bookkeeping instead of hiring an accountant?

While small sole proprietorships might manage simple spreadsheets, limited companies require strict adherence to international reporting standards. By outsourcing your bookkeeping to Alkam & Mulila LLP, you eliminate errors, guarantee regulatory compliance, and free up your time to focus on scaling your business operations.

What accounting software do you recommend for Kenyan businesses?

We support all major cloud-based accounting platforms, including QuickBooks, Xero, and Sage. Our team ensures that your chosen software is fully integrated with your operational needs and correctly formatted to produce audit-ready financial statements.

KRA Tax Compliance & Returns

What is the current corporate tax rate for businesses?

As a major cornerstone of our Accounting and Tax FAQs in Kenya, clients frequently ask about tax liabilities. As of 2026, the standard corporate tax rate for resident companies in Kenya is 30%. Non-resident branches are also subject to this standard 30% rate on their taxable profits.

What is the standard VAT rate, and when must I register?

The standard Value Added Tax (VAT) rate in Kenya is 16%. Any business supplying taxable goods or services with an expected annual turnover of KES 5 million or more must register for VAT with the Kenya Revenue Authority (KRA). Monthly VAT returns must be filed and paid by the 20th of the following month.

How does eTIMS impact my corporate tax deductions?

In 2026, compliance with the electronic Tax Invoice Management System (eTIMS) is strictly enforced. The KRA disallows deductions for any business expenses that are not supported by an eTIMS-compliant invoice. Cash payments without traceable, compliant invoices are considered non-deductible for corporate tax purposes.

What happens if I miss a KRA filing deadline?

Failing to file your tax returns on time results in immediate penalties. For corporate taxes, late filing incurs a penalty of KES 20,000 or 5% of the tax due, whichever is higher, plus interest charged at 1% per month on the outstanding amount.

Audit & Assurance Requirements

Does my limited company legally require an annual audit?

Yes. Under the Companies Act, limited liability companies must have their financial statements audited annually by an independent, practicing professional. As detailed throughout our Accounting and Tax FAQs in Kenya, these audits must strictly adhere to the guidelines established by the Institute of Certified Public Accountants of Kenya (ICPAK).

What is the difference between an internal and external audit?

An external audit is a statutory requirement to verify the accuracy of your financial statements for KRA and stakeholders. An internal audit is an operational review requested by management to evaluate internal controls, risk management, and overall business efficiency. We proudly offer both services.

How long does a statutory audit typically take?

The duration depends on the size of your business and the state of your bookkeeping. If your daily records are meticulously maintained by our accountancy team, the external audit process is significantly faster and less disruptive to your daily operations.

Company Secretarial & BRS Filings

What are Annual Returns, and why must I file them?

A frequent topic in our Accounting and Tax FAQs in Kenya is corporate governance. An Annual Return is a mandatory statutory document filed with the Business Registration Service (BRS) that outlines your company’s current structure, shareholding, and active directors. It is not a tax document, but rather a corporate health check.

What is the penalty for failing to file BRS Annual Returns?

According to Section 705 of the Companies Act, failure to file your Annual Returns on time constitutes a serious legal offense. Both the company and any officer in default risk a fine of up to KES 200,000. Late filing also attracts a separate penalty fee and puts your company at severe risk of official deregistration.

Can Alkam & Mulila LLP act as our official Company Secretary?

Yes. We act as the appointed Company Secretary for numerous organizations across Kenya. We handle the drafting of board resolutions, share transfers, director amendments, and the seamless online filing of your Annual Returns through the eCitizen BRS portal.

Payroll and HR Compliance

What are my statutory obligations as an employer in Kenya?

Employers are legally obligated to make accurate monthly deductions from their employees’ salaries. As highlighted in our Accounting and Tax FAQs in Kenya, this includes Pay As You Earn (PAYE), National Social Security Fund (NSSF) pension contributions, and Social Health Insurance Fund (SHIF) deductions. These must be remitted by the 9th of every month.

How can your firm help with payroll management?

We offer fully outsourced HR and payroll services. We handle all complex salary calculations, generate compliant payslips, process statutory deductions, and ensure that your company’s HR policies align perfectly with Kenyan labor laws.

Consulting & Outsourced Financial Services

Do you provide services for Non-Governmental Organizations (NGOs)?

Absolutely. A major section of our Accounting and Tax FAQs in Kenya applies directly to the non-profit sector. We offer specialized NGO grant auditing, transparent donor fund tracking, and compliance reporting to ensure organizations meet the strict requirements of international stakeholders.

How do I get started with Alkam & Mulila LLP?

Getting started is simple. Contact our team to schedule an initial consultation. We will conduct a high-level review of your current corporate structure and financial standing, then propose a tailored service package designed to optimize your compliance and drive business growth.

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