Insight type: Legal Alert

On 26 June 2024, in response to two weeks of widespread anti-tax protests across major towns and cities in Kenya, President William Ruto recently announced, during a press briefing, the withdrawal of the controversial Finance Bill, 2024 (the Bill). Originally published in the Kenya Gazette on 9 May 2024 and subsequently passed by Parliament on 25 June 2024 amidst nationwide demonstrations, the Bill proposed several amendments, including the introduction of VAT on bread and taxes on products such as diapers and sanitary towels, among other significant measures likely to increase the cost of living. For a detailed review of the Bill and the proposed tax measures, please refer to our analysis of the Finance Bill 2024.

The National Environment Management Authority (NEMA) through a notice dated 8 April 2024 (the Notice) recently announced that all organic waste generated by households, private sectors and public sector institutions, religious institutions, private and public functions, and events shall be strictly segregated and placed in 100% biodegradable garbage bags or bin liners. The Notice requires that all the waste collected as organic waste shall be collected separately (not mixed with other waste types) and should be transported to a designated material recovery facility for further processing. NEMA has directed that the use of conventional plastic garbage bags and bin liners shall cease. The Notice also provides that the County Government and private waste service providers licensed by NEMA must provide their clients with 100% biodegradable garbage bags. The directives set out in the Notice are to be implemented within 90 days of the notice, that is, from 7 July 2024.

After a long period of public consultation and following the enactment of the Climate Change (Amendment) Act in September 2023 (the Amendment Act), the Climate Change (Carbon Markets) Regulations 2024 (the Regulations) were gazetted on 17 May 2024. The Regulations are a welcome step towards providing certainty and predictability in operating carbon projects in Kenya. Additionally, the Regulations aim to establish an operative and institutional framework for carbon markets’ effective and efficient functioning. They also include several key provisions on the categorisation of projects, carbon project prerequisites and timelines for implementation and operationalisation of projects.

In February 2024, ALN Kenya submitted comments to the Ministry of Environment, Climate Change and Forestry, with respect to the draft Climate Change (Carbon Markets) Regulations 2023. We are pleased to note that our recommendations regarding the definitions of land-based and non-land-based projects, inclusion of fiscal and non-fiscal incentives for the development of carbon projects in Kenya, as well as the importance of accounting for business costs when determining the annual social contributions, have been incorporated in the Regulations. ALN Kenya adopts a proactive stance on regulatory review and compliance. Our team keeps abreast of the latest regulatory developments and trends, collaborating closely with clients to identify potential risks and opportunities.

At a glance the Regulations:

• Provide the institutional framework for the review, approval and operationalisation of carbon projects.
• Enhance clarity on land-based and non-land-based carbon projects, differentiating the specific fiscal and non-fiscal incentives suitable for each project type.
• Clarify that the annual social contribution is set at 40% and 25 % for land based and non-land-based projects respectively. Notably, these contributions are to be calculated after deducting the business expenses.
• Require the free and informed consent of landowners where the project proponent does not own the land. This requirement applies where the property is owned by a private person or by a community.
• Indicate that the anticipated timeline for the conceptualisation, approval and commencement of a carbon project may extend up to fourteen months, with project proponents having up to twelve months from the date of receiving a letter of no objection to submit a project design document for approval.

Without any forewarning, the current administration operationalised the 11 years old, Public Benefits Organisations Act (the PBO Act) which replaces the 30-year-old Non-Governmental Organisations Coordination Act (the NGO Act), significantly altering the regulation of not-for-profit entities.

The Finance Bill, 2024 (the Bill) was published and gazetted on 9 May 2024. The Bill proposes to make a raft of amendments to tax-related laws in Kenya, including the Income Tax Act (Chapter 470, Laws of Kenya), the Value Added Tax Act, 2013, the Tax Procedures Act, 2015, the Miscellaneous Fees and Levies Act, 2016 and the Excise Duty Act, 2015.

 

On 24 April 2024 the Trustees Perpetual Succession Act Cap 164 (the TPSA), which governs the procedure for incorporation of trustees into a corporate body and maintenance of a register of trusts in Kenya, was amended.

The Petroleum Industry Act 2021 (PIA) empowers the Nigerian Upstream Regulatory Commission (NUPRC) to conduct bid rounds for the award of petroleum prospecting licences. In 2022, the NUPRC initiated the 2022 Mini-Bid Round for seven deep offshore blocks namely PPL 300-DO, PPL 301-DO, PPL 302-DO, PPL 303-DO, PPL 304-DO, PPL 305-DO, PPL 306-DO. However, the process was postponed due to the 2023 national elections.

In the ever-evolving landscape of employment law, new frontiers continually emerge, posing dilemmas for employees and employers alike, especially in cross-border contexts. With the advent of the digital age, where company data is integral to business operations, instances of employees misappropriating such data upon leaving employment have become increasingly common. This presents significant challenges in addressing such breaches, particularly for employers with operations spanning multiple jurisdictions. Further, the transient nature of digital assets adds another layer of complexity, as they can easily be deleted, destroyed, or exploited inappropriately. What recourse, then, should an employer have in such situations? 

In a recent important High Court decision, the court found a bank liable for repayment of money erroneously credited into a customer’s account by a third-party, even though the initial mistake was that of the third-party.