Kenya’s contentious Finance Bill 2024, which seeks to raise an additional Kes 346.7 billion worth of revenue in 2024/25, enters the final stage before adoption, having sailed through the Committee of the Whole House in record time.
- Yes, 195
- No. 106
- Spoiled: 3
Amendments commenced at about 10:23 a.m. and were done by about 12:23 p.m.; it’s unprecedented.
Here’s a breakdown of the amendments passed.
The House endorsed a new clause amending Section 8 of the Miscellaneous Fees and Levies Act to increase the Railway Development Levy from 1.5% to 2.5% effective July 1st, 2024.
The House endorsed two critical things regarding eTIMS: · If you deal with a business whose annual turnover is <Kes 1.0M, the onus for raising the eTIMS invoice will be on you, not the business. · The proposed Kes 2.0M/month penalty for non-eTIMS integration has been revised downward to Kes 500,000.
The proposal to amend the Income Tax Act to provide for motor vehicle tax at 2.5% of the value of a unit capped at Kes 100,000 and with Kes 5,000 as the floor via Sec 12H has been dropped.
The House endorsed the extension of the Tax Amnesty Programme from the June 30th, 2024, sunset date to March 31st, 2025.
The proposal to amend the Third Schedule of the Income Tax Act, introducing withholding tax on infrastructure bonds, has been endorsed. The rate is 5.0% for both residents and non-residents.
The proposal to amend the income tax by introducing Sec. 18G, which provides for advance pricing agreements between taxpayers and the Kenya Revenue Authority, was endorsed. Critically, we will have to wait for regulations coming from the authority.
The House endorsed the proposal to amend Section 7 of the Miscellaneous Fees and Levies Act to increase the import declaration fee from 2.5% to 3.5%.
The proposal to amend the Income Tax Act by introducing Clause 4C, which provides for withholding tax on goods supplied to public entities, was endorsed.
The House endorsed the proposed overhaul of the Digital Services Tax and its replacement with the Significant Economic Presence Tax via an amendment to the Income Tax Act introducing Sec. 12E. Do note that the deemed turnover has been revised from the proposed 20.0% to 10.0%.
The proposal to delete Section 14 of the Excise Duty Act providing for input-output offsets of excise duty by manufacturers and internet service providers has been dropped.