Public hearings begin on Tax Laws Amendment Bill, 2024
The Bill is expected to raise Sh178 billion to support the 2024/2025 national budget by revising key tax categories, including excise duty, income tax, and VAT.
The National Assembly’s Finance and National Planning Committee has begun public hearings on the Tax Laws Amendment Bill 2024, starting in Isiolo and Bungoma counties on Monday.
The Bill is expected to raise Sh178 billion to support the 2024/2025 national budget by revising key tax categories, including excise duty, income tax, and VAT.
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The National Treasury views this bill as essential to filling the gap left by the withdrawal of the Finance Bill 2024 and financing key development projects.
The hearings, which are part of a wider public consultation process, allow Kenyans the chance to voice their opinions on the proposed tax changes. The focus is on the Tax Laws Amendment Bill, which is designed to generate additional revenue for the government.
Among the major proposed revisions is the introduction of the Significant Economic Presence Tax, a replacement for the Digital Service Tax.
This new levy targets non-resident individuals and businesses earning income in Kenya, applying a six per cent tax rate on foreign earnings.
Digital businesses
Digital businesses, such as ride-hailing apps, will also be affected, with a proposed 10 per cent tax on their gross turnover, classified as taxable profit.
Other key proposals include a 16 per cent VAT on air tickets bought through travel agents, which are currently exempt, and a 16 per cent VAT on entry fees to national parks and reserves, as well as on tour operator services.
In a move aimed at supporting agriculture, the Treasury plans to exempt pest control products, fertilizers, and raw materials used in their production from VAT. This initiative seeks to lower manufacturing costs and make products more affordable for farmers.
To ease financial burdens on employees, the Treasury has proposed allowing deductions for the Housing Levy and Social Health Insurance Fund (SHIF) contributions before calculating income tax.
For example, an employee earning a gross salary of Sh50,000 would be taxed on Sh45,715, rather than Sh47,840, resulting in a saving of Sh525.
Additionally, the Tax Procedures Amendment Bill 2024 proposes extending the Tax Amnesty Programme from June 30, 2024, to June 30, 2025, enabling taxpayers to regularise their tax compliance without penalties.
The public hearings will take place across the country, concluding with final sittings in Nairobi at the Kenyatta International Convention Centre (KICC) from November 25 to November 28.
These hearings provide an important platform for citizens to influence the final form of the bills, which are set to have a significant impact on businesses and households nationwide.
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