The Finance Bill 2024 is a crucial legislative proposal that details the government’s financial strategy for the year, covering taxation, revenue collection, and public spending.
“Most of the 49 amendments in the bill will be very favourable and won’t have direct implications for Kenyans,” according to Treasury CS John Mbadi.
The Finance Bill 2024 in Kenya includes numerous amendments that reflect the government’s focus on adjusting tax policies to address economic needs, promote investment, and ensure effective revenue collection.
Here’s a summary of the 49 key amendments:
1. Income Tax:
- The personal income tax bands and rates have been revised.
- There have been modifications to the corporate tax rates and thresholds.
- The government will offer new tax reliefs or deductions for specific sectors or activities.
2. Value Added Tax (VAT):
- There have been changes in VAT rates for various goods and services.
- Introduction of new VAT exemptions or inclusions.
3. Excise Duty:
- There have been increases in excise duty on certain goods, such as alcohol, tobacco, and fuel.
- The new excise duty rates are applicable to previously untaxed products.
4. Digital Economy:
- There are improved guidelines for taxing digital services and e-commerce platforms.
- The introduction of new compliance requirements for digital service providers is underway.
5. Environmental Taxes:
- The introduction of carbon taxes or increased rates on environmentally harmful products would be beneficial.
- There are new tax incentives available for green technologies and sustainable practices.
6. Public Debt:
- There are provisions for managing and restructuring public debt.
- New regulations on borrowing limits and debt servicing are being implemented.
7. SME Support:
- The government offers tax reliefs or incentives specifically targeted at small and medium enterprises.
- SMEs’ tax compliance can be simplified.
8. Administrative Changes:
- Updates to tax administration procedures and compliance requirements.
- The government has introduced new reporting obligations for businesses and individuals.
9. Property Taxes:
- State making adjustments to property tax rates or valuation methods.
- There are new provisions for taxing rental income or property sales.
10. Investment Incentives:
- The government is offering new tax incentives for investments in priority sectors or regions.
- There have been changes to the existing tax holidays or investment deductions.
11. Healthcare and Education:
- There are tax exemptions or deductions related to healthcare and educational expenses.
- Adjustments to the tax treatment of charitable donations.
12. Import Duties:
- Changes in import duties apply to specific categories of goods.
- New regulations or exemptions for essential imports are being considered.
13. Banking and Finance:
- Tax measures affecting the banking sector, including changes to banking levies.
- The new provisions aim to tax financial transactions or instruments.
14. Penalties and Enforcement:
- The penalty for non-compliance with tax regulations has increased.
- Enhanced enforcement measures for tax collection and compliance.
15. Constitutional Provisions:
- Guidelines on how existing tax laws will transition to the new provisions.
- Transitional reliefs and implementation timelines.
