Advance tax: what a matatu, lorry or boda owner pays before licensing
By David Wachira · KRA hub · paybillke is an independent guide and is not affiliated with KRA.
Advance tax is paid on commercial and public service vehicles before they are licensed. Load vehicles pay KShs 1,500 per ton of load capacity. Passenger vehicles pay KShs 60 per passenger capacity per month. Either way the floor is KShs 2,400 a year. It is due by 20 January, or before transfer of ownership. Critically, it is not a final tax.
Not a final tax, and that is the part that costs people money
This is the single most important thing on this page, so it goes first.
Advance tax is not a final tax. Paying it does not settle your income tax on the vehicle. It is a credit against the income tax you owe on that business for the year, and you still have to file a return declaring the income and claim the advance tax you already paid.
Two failure modes follow. If you treat advance tax as the end of the matter and never file, you have an unfiled return and a compliance problem, which will surface the next time you need a Tax Compliance Certificate. And if you file without claiming the advance tax you paid, you pay twice on the same income. Keep the payment slips.
How the two rates work
KRA splits vehicles into load-carrying and passenger-carrying, and charges each on a different basis.
Load vehicles — vans, pick-ups, trucks, prime movers, trailers and lorries — are charged KShs 1,500 per ton of load capacity per year. A 3-ton lorry is 3 × 1,500 = KShs 4,500.
Passenger vehicles — saloons, station wagons, mini-buses, buses and coaches — are charged KShs 60 per passenger capacity per month. Note the per-month: a 14-seater matatu is 14 × 60 × 12 = KShs 10,080 a year, not KShs 840. This is the calculation people get wrong, because the rate is quoted monthly while the liability is annual.
Both have the same floor. Whichever formula applies, the minimum is KShs 2,400 per year. A small pick-up under 1.6 tons still pays 2,400, not 1,500 × its tonnage.
When it is due
Advance tax is payable on or before 20 January of the year, or before the vehicle's ownership is transferred, whichever comes first.
The transfer trigger is worth knowing if you are buying a used matatu or lorry. The tax attaches to the licensing of the vehicle, so it can become your problem at the point of sale rather than in January. Ask before money changes hands.
Paying it
Like all KRA payments, advance tax runs on a Payment Registration Number (PRN) generated on iTax. You generate the PRN first, then pay against it.
The PRN slip names which paybill that particular payment wants. KRA has two live paybills, 222222 and 572572, and the slip is what decides between them. Do not assume one or the other from memory, and do not pay without a PRN, because an unreferenced payment is far harder to trace than it is to make.
About this page
| Vehicle type | Rate | Worked example | Annual minimum |
|---|---|---|---|
| Van, pick-up, truck, prime mover, trailer, lorry | KShs 1,500 per ton of load capacity | 3-ton lorry: 3 × 1,500 = KShs 4,500 | KShs 2,400 |
| Saloon, station wagon, mini-bus, bus, coach | KShs 60 per passenger capacity per month | 14-seater: 14 × 60 × 12 = KShs 10,080 | KShs 2,400 |
Frequently asked
How much advance tax does a 14-seater matatu pay?
KShs 60 per passenger per month, so 14 × 60 × 12 = KShs 10,080 a year. The rate is quoted monthly but the liability is annual, which is the step most people miss.
How much advance tax does a lorry pay?
KShs 1,500 per ton of load capacity per year, with a minimum of KShs 2,400. A 3-ton lorry pays KShs 4,500.
Is advance tax a final tax?
No. It is a credit against the income tax you owe on the vehicle's income for the year. You still have to file a return and claim it, or you will pay twice on the same income.
When is advance tax due?
On or before 20 January, or before the transfer of ownership of the vehicle, whichever comes first.
What is the minimum advance tax?
KShs 2,400 per year, whichever formula applies to your vehicle.
Do boda bodas pay advance tax?
Advance tax as published by KRA applies to commercial load vehicles charged per ton and passenger service vehicles charged per passenger seat. Check your own vehicle's classification with KRA rather than assuming, because the classification decides the formula.