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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.
14 May 24
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Generally, bills come into effect either on the date of assent by the President or on the date of operation specified within the bill, whichever is earlier. We note that in the Bill, some of the proposed amendments, particularly those relating to income tax, have an effective date of 1 January 2025, while most of the other proposed amendments have been indicated to come into force on 1 July 2024 and 1 September 2024.
The proposals in the Bill can be seen to target an increased tax base and enhancing revenue collection. These include the proposed introduction of the Significant Economic Presence Tax and Motor Vehicle Tax, and proposed increase in the rates of excise duty on data, money transfer services, and betting and gaming activities. The Bill also proposes to introduce Advance Pricing Agreements into the transfer pricing regime and repeal various tax exemptions, including income tax exemptions on infrastructure bonds, as well as Value Added Tax (VAT) exemptions on various financial services and sector-specific exemptions that are currently in place in the tourism, health and e-mobility sectors.
We have set out below a highlight of the key proposed amendments in the Bill as well as their potential impact on businesses in Kenya.
Click here to download the analysis of proposed tax changes under the Finance Bill, 2024.