i) Pension income
Pension income is taxable in Kenya. However the first sh. 300,000 of pension withdrawals from a pension or provident fund is tax exempt. On withdrawals of lump sums the first shillings 60,000 per year of pensionable service is exempt from taxation to maximum of shs. 600,000. In case withdrawals of pension relates to a deceased person defendants the first sh.1,400,000 is tax
exempt.
ii) Interest on housing development bonds
The interest is taxed at withholding tax rates of 10% which is final tax for individuals. However, for corporate bodies it‘s the same 10% which is not final tax. The gross interest will be added to other incomes of the corporate body and taxed at corporate tax rate. Tax earlier deducted will be set off.
iii) Dividends from co-operative societies
These are known as non-qualifying dividends. The withholding tax at the rate of 15% is not final tax. The gross dividend are added to the incomes of the tax payer at end of tax year and taxed at the appropriate scale rates.
Wilfykil answered the question on February 15, 2019 at 10:38
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