The government is set to reinstate eight unpopular tax measures initially proposed in the now-repealed Finance Bill 2024.
The tax measures will be combined in three new bills, the Tax Laws (Amendment) Bill 2024, the Tax Procedures (Amendment) Bill 2024 and the Public Finance Management (Amendment) Bill 2024 set to be tabled in the National Assembly.
The new tax proposals include:
1. Expanding the digital marketplace which will entail the amendment of Section 3 of the Income Tax Act to include additional digital operators in the tax bracket.
2. Minimum top-up tax, which proposes foreign corporations doing business in Kenya pay a minimum tax rate of 15%.
3. There is also a proposal to increase the pension contribution limit from KSh 240,000 to KSh 360,000 annually.
4. President Willliam Ruto’s government also plans to impose a withholding tax of 0.5% on residents and 5% on non-residents on products delivered to public entities.
5. Significant Economic Presence Tax which will be imposed on non-residents who make money from online sales.
6. The government has also proposed to tax infrastructure bonds at a 5% rate. At the moment, interest accrued from infrastructure bonds is currently untaxed.
7. Also, Kenyans working remotely have been targeted and it is now a requirement that they must have KRA PINs.
8. Further, if the Tax Laws (Amendment) Bill 2024 is approved, contributions to the Social Health Insurance Fund (SHIF) and the housing levy will henceforth be tax deductible.