Why do I owe tax if withholding was already deducted?

The short answer

Because withholding tax (WHT) is a prepayment, not a final tax. When a client deducts tax before paying you, they're paying a deposit on your behalf to KRA. At year end you still file a return, and KRA works out your actual tax. The deposit is then subtracted. Sometimes it covers everything; sometimes it doesn't.

A worked example

Say you did consultancy work and earned KES 1,000,000 in fees. WHT on professional and consultancy fees is 5%, so your clients deducted KES 50,000 and remitted it to KRA. You received KES 950,000.

But your actual income-tax liability — once your total income is run through the proper graduated rates — might be KES 120,000. The KES 50,000 already paid is credited against that. So you'd still owe KES 70,000 when you file.

The reverse can also happen: if your reliefs and expenses are high, the 5% prepaid could be more than your final tax — and then you're due a refund.

Key idea: the 5% WHT is a down payment toward your final bill. The return is where the real maths happens.

Why this surprises people

Lots of Kenyans assume "tax was deducted, so I'm sorted." For employees on PAYE that's often roughly true. But for consultants, freelancers and landlords, the withheld amount is rarely the full story — especially across multiple income streams that each got taxed in isolation.

What Ushuru does about it

We add up all your income, apply the correct rates and reliefs, then subtract everything already withheld or paid. You see one clear number: a top-up to pay or a refund you're owed. No guessing.

If it turns out you owe across past years, check Understanding the 2026 tax amnesty — you may be able to clear it without the penalties and interest.