Analysis of the Kenya Finance Bill, 2024

Analysis of the Kenya Finance Bill, 2024

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Contents

The Finance Bill, 2024(“The Bill”), was tabled to the National Assembly on 13 May 2024 for the first reading. The proposals in the Bill are likely to have a significant impact on stakeholders if implemented as it is.

In this Tax Alert, we analyse changes proposed by the Bill and the potential implications.

As always do share with us your thoughts and inputs. We shall be compiling views from our stakeholders to be included in our memoranda to be submitted as part of the public participation process.

Highlights

  • Introduction of Motor Vehicle Tax at 2.5% of the value of the car subject to a minimum of KES 5,000 and maximum of KES 100,000;
  • Taxation of Per Diems to be revised subject to an employer having an approved per diem policy with exempt amounts being pegged at a maximum daily allowance of 5% of the employees’ gross monthly salary;
  • Pension contribution limit increased to KES 30,000pm from KES 20,000pm;
  • Repealing of Digital Services Tax and introduction of significant economic presence tax with an effective tax rate of 6%;
  • Introduction of Advance Pricing Agreements;
  • VAT registration threshold increased from KES 5,000,000pa to 8,000,000pa;
  • Transfer of Business as a Going Concern will now be exempt from VAT;
  • Certain financial services will now be subject to VAT;
  • Bread to attract VAT at 16% from zero-rated status;
  • Introduction of Eco Levy
  • Amongst others.

For a comprehensive breakdown of the proposed changes please click on the link below to download our analysis.

Analysis of the Kenya Finance Bill, 2024/2025

Analysis of the Kenya Finance Bill, 2024/2025

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