Treasury’s New Tax Proposals Seek Ksh.178 Billion as Public Hearings Begin
Kenyans will get a chance to voice their opinions on two critical tax bills proposed by the National Treasury as public hearings kick off on November 18. The centerpiece is the Tax Laws Amendment Bill 2024, which aims to raise over Ksh.178 billion to address the 2024/2025 budget deficit and support national development projects.
The bill seeks to revise major tax categories, including excise duty, income tax, and value-added tax (VAT). Key proposals include replacing the Digital Service Tax with the Significant Economic Presence Tax, imposing a 6% levy on income earned by non-residents in Kenya. Additionally, businesses operating in the digital marketplace, such as ride-hailing apps, face a proposed 10% levy on gross turnover.
Consumers could also feel the impact with a 16% VAT on air tickets purchased through travel agents and entry fees to national parks and reserves. However, the Treasury plans to exempt pest control products, fertilizers, and related raw materials from VAT, aiming to boost agricultural productivity and affordability.
To ease financial pressure on employees, contributions to the Housing Levy and Social Health Insurance Fund (SHIF) will be treated as allowable deductions, reducing taxable income. For example, an employee earning Ksh.50,000 could save Ksh.525 under the new rules.
The Tax Procedures Amendment Bill 2024 also proposes extending the Tax Amnesty Program to June 30, 2025, allowing taxpayers more time to regularize compliance without penalties.
Public hearings, led by the National Assembly’s Finance and Planning Committee, will run in various regions, concluding in Nairobi from November 25 to 28. This process provides Kenyans with a vital platform to shape the final legislation, which will have far-reaching effects on businesses and households nationwide.
Treasury’s New Tax Proposals Seek Ksh.178 Billion as Public Hearings Begin
