This implementation follows the changes introduced through The Industrial Training (amendment) order of 2020 that was gazetted on 21st February 2020. The new changes to the existing Industrial Training order of 2007 gave the effective date for the changes as 23rd December 2019.
In order to enhance enforcement and collection, National Industrial Training Authority(NITA) and The Kenya Revenue Authority (KRA) have joined hands and stepped forward to implement a Unified Payroll Return (UPR) for joint declaration and payment of Pay as You Earn and Industrial Levy Training deductions.
The move is one of the initiatives by the Government of Kenya’s ‘Ease of Doing Business’ agenda aimed at simplifying the process of paying the NITA levy by making it a one off annual payment and reducing employer’s compliance efforts costs.
Following this notice, all employers are required to file their December 2020 PAYE and Industrial Training Levy returns through the unified payroll return available on the KRA iTax system for all employees be they permanent, pensionable, secondary or temporary.
How will the implementation take place?
The unified payroll return will start with the payroll for the month of December 2020 which is due by 9th January 2021.
The Industrial Training Levy deductions will be paid annually by the 9th of the subsequent month following the end of the Employer’s accounting period/financial year at the rate of sh600 per employee per annum. This is a change from the previous requirement for employers to remit a levy per employee monthly.
Employers who had fully paid their contributions for the year 2020 will not be required to pay by the above due date as they had already complied with the previous NITA requirements. Their next payments will be done after the end of their next accounting period.
The employer will be required to log onto the itax, file the return by filing in their employees details. Filing will be made before making any payments while the payments will be made separately for NITA and PAYE.
The Unified Payroll Return attracts the following benefits;
When employers are compliant, NITA ensures that all industrial training costs are shared evenly and employers can receive reimbursements for certain trainings when they make applications.
This will be a one off annual payment that will reduce employer’s compliance efforts costs.
Penalties for non-compliance
Failure to pay the training levy attracts a 5% penalty on the amount due.
Temporary Exemption
Freshly registered businesses that are less than 12 months old i.e. (those that were registered from the 23rd December 2019 onwards) and have less than 100 employees, will not be required to make NITA payments until after the twelve-month period. This is a temporary and not a permanent exemption.
For additional information with respect to this alert, please contact;
Beatrice Kamau
Outsourced Services Manager
t +254 715 248882 | +254 733 533449
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