National Treasury Cabinet Secretary John Mbadi in a past occasion// Photo Courtesy
The National Treasury is planning to introduce a finance bill a few months after Kenyans rejected Finance Bill 2023 which made President William Ruto not to sign the bill into law.
According to reports, the Treasury through CS John Mbadi, proposes recommendations through the Tax Laws (Amendment) Bill 2024 and Tax Procedures (Amendment) Bill 2024.
The bill proposes a Minimum Top-up Tax for multinationals in Kenya with annual turnovers of at least Sh100 billion. Through this, the Treasury says that if their effective tax rate is below 15%, these companies will pay this additional tax to align with global standards.
The bill also suggests a remittance on exercise duty on spirits from sorghum, millet or cassava or any agricultural products grown in Kenya except barley, in order to amend section 5 of the Excise Duty Act.
The Treasury wishes to increase Railway Development Levy from 1.5 percent to 2.5 percent under the Miscellaneous Fee and Levies Act.
According to the reports, a new tax, that is, Significant Economic Presence tax is recommended for introduction.
The Treasury also recommends that non-residents whose income is derived from digital marketplace to pay excise duty.
Likewise, excise duty rates for imported sugar, confectionery and alcohol is recommended to be increased.
There are also proposals to repeal section 15 of the Affordable Housing Relief to remove tax reliefs on affordable housing investment.
The finance ministry is also recommending deduction of rents from certain incomes which require withholding tax on rent for better compliance and transparency.
Those who do not comply with Export Processing Zones tax regulations, will be fined, according to the reports.
Deductions for National Social Security Funds (NSSF), will be increased to support long term savings for retired people.
The Treasury also recommends to harmonise insurance tax reliefs through the Social Health Authority (SHA) Act.
The ministry also suggests that new rules for electronic tax invoicing be introduced to improve transparency and to extend KRA pin requirements for remote work.
It’s also reported that the Treasury wishes to provide financial support to devolved government functions through such proposals.
The Treasury also recommends that timely enactment of revenue sharing of bills to fund counties should be effected.
John Mbadi also suggests that taxes on mobile services and internet be reintroduced.
