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This case study outlines a common compliance challenge faced by employers in Kenya regarding registration with the National Industrial Training Authority (NITA). One of our clients sought clarification on when an employer is legally required to register and begin remitting the NITA levy.
NITA is a state corporation established under the Industrial Training (Amendment) Act of 2011. Its mandate is to promote high standards of industrial training across Kenya and ensure that the country maintains a sufficient supply of well-trained personnel at all industry levels.
All employers in Kenya are required to:
Although the Industrial Training (Training Levy) Order indicates under paragraph 3A that employers with fewer than 100 employees are exempt from registration and levy remittance during their first year of operation, this exemption is not applied in practice.
Government portals may appear to suggest an exemption however in practice employers are required to register immediately upon incorporation regardless of the workforce size.
Penalties are imposed on employers that fail to do so. To avoid unnecessary penalties, it is recommended that employers take a proactive approach:
“In practice, all employers in Kenya must register with NITA immediately upon incorporation, regardless of employee count.”
A client recently incorporated an entity in Kenya but did not register with NITA, believing that registration was unnecessary since they had only 15 employees. After submitting their first month’s payroll information to the Kenya Revenue Authority (KRA), the client was informed that penalties had been imposed on their account for:
These penalties were applied retrospectively from the date of incorporation, even though the business had fewer than 100 employees. While the penalty amounts were relatively small, they were still enforceable and required settlement.
