Following the assent of the Tax Laws Amendment Bill 2020, new tax rates for Kenyan PAYE come into effect from April 2020. The tax laws amendment act 2020 has introduced Investment allowance in Part II Second Schedule which is also in Part V of . Archives. All the changes below become effective on 25th April 2020. 2. 13,944 per year to Ksh. The Tax Laws (Amendment) Act, 2020 amended various tax laws and was aimed at responding to the COVID-19 pandemic (for background on the Act, see EY Global Tax Alert, Kenya enacts Tax Laws (Amendment) Act, 2020 , dated 28 April 2020). The Tax Laws (Amendment) Bill, 2020 - Tax - Kenya Kenya - Individual - Taxes on personal income PAYE is a monthly tax which is accounted for on a calendar month basis. 470. Executive summary. USD 215) with a view of cushioning low . Many Kenyans will benefit from this and increase disposable income to the individuals in this income band. Changes to the Stamp Duty Act The Stamp Duty Act has been amended to provide that documents can be electronically stamped, extending the scope of the initial provision, which only recognized stamping by a franking machine or an adhesive stamp. Given that most payments from Kenya for services provided by a non resident These measures have now been submitted to the National Assembly under the Tax Laws (Amendment) Bill, 2020 (the Bill) for consideration and approval. The proposed amendment intends to restate the corporation tax rate to 30% from 25% on income earned from 1st January 2021. The Executive has given two dates for VAT rate change commencement: 1 st April 2020 according to the Gazette Notice and 15 th May 2020 according to Tax Laws (Amendment) Act, 2020. PDF The Tax Laws (Amendment) (No.2) Act, 2020 5. legal alert | The Finance Bill, 2020 | A&K | ALN Kenya PDF Finance Act, 2019 The tax amendments proposed in the Bill are . Kenya - Corporate - Significant developments Central Bank of Kenya and on a bond approved by the CS Finance that was . The Finance Act, 2020 increased the threshold for the annual gross rental income from KES 10 million or less to KES 15 million or less. Enacted provision: Income tax will now be imposed on income accruing from businesses carried out over the internet or an electronic network, including through a digital marketplace. Finance Act 2021 Income Tax . Exemption nullified Proposal retained Kenya Tax Guide -types of statutory taxes | Ronalds LLP The Residential Rental Income Tax is one of the multiple property taxes which fall under the income tax umbrella. 15,360 per year. November 2020 . to tax in respect to income earned in or derived from Kenya. A month since he outlined his proposals, he assented to the Tax Laws (Amendment) Act, 2020 (the Act) on . 8. 12 Mar - East Africa: Tax card for 2020-2021 (Kenya, Rwanda, Tanzania, Uganda) 12 Mar - Kenya: Bank service fees held exempt from VAT, excise tax (appellate tribunal decision) Kenya Revenue Authority (KRA) has implemented new Pay as You Earn (PAYE) rates in 2020. Additionally, the TLAA increased the tax-free income to KES 24,000 (approx. What is the effective date of the new rates and what is the way forward for such employers? This comes months after the Finance Act 2016 was signed into law by the president. The Finance Act, 2020 (the Finance Act) was assented to by President Uhuru Kenyatta on 30 June 2020 to make amendments to a raft of laws in Kenya, including the Income Tax Act (CAP 470), the Value Added Tax Act, 2013, the Tax Procedures Act, 2015, the Miscellaneous Fees and Levies Act, 2016 and the Excise Duty Act, 2015 among other miscellaneous amendments. The Finance Act, 2020 was published on 19 June 2020 (the Finance Act) to make amendments to a raft of laws in Tanzania including the Income Tax Act (CAP 332), the Value Added Tax Act (CAP 148), the Tax Administration Act (CAP 438), the Vocational Education and Training Act (CAP 82), the Excise Duty (Management and Tariff Act The Tax Laws (Amendment) Act, 2020 On Saturday 25th April 2020, President Uhuru Kenyatta signed into law the Tax (Amendment) Bill,2020 effectively cushioning Kenyans against the adverse effects of the COVID-19 Pandemic. This was a culmination of the budgetary process which began with the introduction of the Finance Bill, 2020 to Parliament on 6 May 2020. The tax is applicable on the gross transaction value of the service provided and is due at the time of payment. Kenya's Tax Laws Amendments Bill, 2020 (the Bill) proposes to make various changes to the prevailing tax laws in Kenya. 2) Bill, 2020 Keeping you in the loop In April 2020, the Government of Kenya introduced measures that were aimed at cushioning individuals and businesses from the impact of Covid-19. The Finance Act of 2015 defines this tax as the amount to be paid for the accrued incomes collected from the residential properties of Kenya. Under the Tax Laws (Amendment) Act, 2020 the tax rates for many taxpayers were reduced. 2) on 27th Apri . CHAPTER 470 INCOME TAX ACT ARRANGEMENT OF SECTIONS PART I - PRELIMINARY Corporation tax rate reduced from 30% to 25% effective 1 st January 2020. The newly introduced bases of taxation are in the form of a transaction tax or a turnover tax. LAWS OF KENYA INCOME TAX ACT CHAPTER 470 Revised Edition 2018 [2012] Published by the National Council for Law Reporting with the Authority of the Attorney-General www.kenyalaw.org [Rev. Interpretation (1) In this Act, unless the context otherwise requires— 12D. An entity will be regarded as resident if it is incorporated under Kenyan laws, effectively managed and controlled or declared to be resident in Kenya by the 24,000 monthly will continue to be exempt from income tax. For background on the Bill, see EY Global Tax Alert, Kenya proposes Tax Laws Amendments Bill, 2020, dated 16 April 2020. Section 6A of the Income Tax Act is amended in subsection (1) by deleting— . While the Act provides specific interventions to aid the fight against The Finance Bill, 2020 was published on 5 May 2020 (the Bill) to make amendments to a raft of laws in Kenya, including the Income Tax Act (CAP 470), the Value Added Tax Act, 2013, the Tax Procedures Act, 2015, the Miscellaneous Fees and Levies Act, 2016 and the Excise Duty Act, 2015 among others. This was followed by the issuance of the Income Tax (Digital Service Tax) Regulations, 2020 which This was followed by the issuance of the Income Tax (Digital Service Tax) Regulations, 2020 which became effective on 2 January 2021. In computation of taxable income, the depreciation rate as per income tax act will be allowed as deduction while depreciation as per book profit is added back. Minimum tax. 23 Mar - Ghana: Tax provisions in 2021 budget. The Tax Laws (Amendment) Bill, 2020 was published on 30 March 2020 (the Bill) to make amendments to tax-related laws in Kenya including the Income Tax Act (CAP 470), the Value Added Tax Act, 2013, the Miscellaneous Fees and Levies Act, 2015 and the Excise Duty Act, 2015.The National Assembly will, on 8 April 2020, consider and vote on the Bill and forward it for assent to the President. However, the withholding tax rate on dividend payments to non-residents has been increased from 10% to 15%. It has introduced a minimum tax to be paid by taxpayers whether they are loss making or not, increased the maximum residential rental income subject to the 10% tax from KES 10million to The Finance Act 2020 introduced a digital services tax (DST) on income from services provided through a digital marketplace in Kenya at the rate of 1.5% on the gross transactional value. On 25 March 2020, the President of the Republic of Kenya outlined the measures the government intends to make to cushion the country against the economic effects of COVID-19. 1.1 Income Tax 1.1.1 Reduced rate of Corporate Income Tax (CIT) rate for resident companies Residential Rental Income Tax The Act increases the upper threshold of Residential Rental Income from Kshs 10 million to Kshs. This was followed by the issuance of the Income Tax (Digital Service Tax) Regulations, 2020 which became effective on 2 January 2021. This Act may be cited as the Tax Laws (Amendment) Act, 2020 and shall come into operation, or be deemed to have come into operation on the date of assent. the finance act, 2020 (the finance act) was assented to by president uhuru kenyatta on 30 june 2020 to make amendments to a raft of laws in kenya, including the income tax act (cap 470), the value added tax act, 2013, the tax procedures act, 2015, the miscellaneous fees and levies act, 2016 and the excise duty act, 2015 among other miscellaneous … Executive summary. As such, the Government is seeking to incentivise investors through the introduction of an investment deduction in the Income Tax Act for capital expenditure of at least KES 5 billion in relation to construction of bulk storage and handling facilities for supporting the SGR operations of a minimum storage . (2) ThisAct shall come into operation on 1st January, 2021. The new definition introduces a new concept of a service PE. However, the tax rate for landlords did not change. Section 48 mentions section 79 which is cancelled or nullified or repealed. 31 Mar - Nigeria: Corporate income tax, procedures for making payments in installments. Depreciation Rates as per Income Tax for FY 2020-21 / AY 2021-22. The Income Tax Act is amended by inserting the following new sections immediately after section 12C— Insertion of new sections 12D and 12E in Cap. The President of Kenya assented to the Tax Laws (Amendment) Act, 2020 on 25 April 2020. the Companies Income Tax Act, Value Added Tax Act, Petroleum Profits Tax Act, Personal Income Tax Act, Capital Gains Tax Act, Customs and Excise Tariff Etc. This is one of the property taxes of the many statutory taxes in Kenya. N.A.B. THE TAX LAWS (AMENDMENT) BILL, 2020 A Bill for AN ACT of Parliament to make amendments to tax related laws ENACTED by the Parliament of Kenya, as follows— 1. Income tax ( New PAYE Rates 2020 in Kenya) The Kenyan government has proposed a 100% tax relief for individuals earning a gross monthly income of up to KES 24,000. 1 This Act may be cited as the Income Tax Act and shall subject to the Sixth Schedule, come into operation on 1st January, 1974, and apply to assessments for the year of income 1974 and subsequent years of income. INCOME TAX AMENDMENTS - THE TAX LAWS (AMENDMENT) ACT, 2020 27 April 2020 The Tax Laws (Amendment) Act, 2020 was assented to on 25th April 2020. In addition, Finance Act 2020 introduced an amnesty programme in the form of a Voluntary Tax Disclosure Programme (VTDP) for a period of three years . The landlords falling under this category are required to pay residential rental income tax at a flat rate of 10% on the gross rental income such that no tax-deductible expenses are allowed. The Finance Bill, 2020 was published on 5 May 2020 (the Bill) to make amendments to a raft of laws in Kenya, including the Income Tax Act (CAP 470), the Value Added Tax Act, 2013, the Tax Procedures Act, 2015, the Miscellaneous Fees and Levies Act, 2016 and the Excise Duty Act, 2015 among others. The Act follows the enactment of the Tax Laws (Amendment) Act, 2020 on 25 April 2020. 470. Finance Act, Kenya 2020 . January, 2020, by the insertion after paragraph (a) of the following paragraph— July 2020. These measures were submitted to the National Assembly under the Tax Laws (Amendment) Bill, 2020 (the Bill) for consideration and approval. The key tax laws that the Bill seeks to amend include: The Income Tax Act, Value-Added Tax (VAT), Excise Duty Act, Tax Procedures Act and Miscellaneous Fees and Levies Act and the Kenya Revenue Authority Act. The various tax incentives for new listings or introductions on an approved securities exchange have been eliminated. AMENDMENTS TO THE INCOME TAX ACT (CAP 470) 1. 15 million per annum. On 30 June 2020, the President of Kenya assented to the Finance Act, 2020. (1) ThisAct maybecited as the IncomeTax(Amendment) Act, 2020, and shall be read as one with the Income Tax Act, in this Act referred to as the principal Act. Reduction of PAYE rate from 30 per cent to 25 per cent. The definition of a PE in the Kenya Income Tax Act where there is no explicit charging provision bringing PEs to the Kenya charge of tax continues to remain an odd feature of the Kenya Income Tax Act. Effective 1 January 2021, The Finance Act, 2020 introduced a 1.5% tax on income from services accrued or derived in Kenya through a digital marketplace. THE TAX LAWS (AMENDMENT) BILL, 2020 A Bill for AN ACT of Parliament to make amendments to tax related laws ENACTED by the Parliament of Kenya, as follows— 1. PART II— INCOME TAX ACT 2. The Tax Laws (Amendment) Act, 2020 was assented to on 25th April 2020. Kenya enacts Finance Act, 2020. AN ACT of Parliament to make amendments to tax related laws ENACTED by the Parliament of Kenya, as follows — 1. The Tax Laws (Amendment) Act, 2020. (a) a person who is, or was at the time of the employment or when the services were rendered, a resident person in respect of any employment or services rendered by him in Kenya or outside Kenya; or. The Tax Laws (Amendment) Act, 2020 (the TLAA) reduced the marginal tax rate on Pay as You Earn (PAYE) from 30% to 25% as a temporary measure to minimise the economic impact of the COVID-19 pandemic on employees from 25 April 2020. Income from employment, etc. Section 2 of the Kenya Income Tax Act . Recent Posts. The Finance Act, 2020 (the Act) builds on the changes introduced through the Tax Laws (Amendment) Act, 2020 (TLAA). Depreciation is allowed as deduction under section 32 of Income Tax Act, 1961. In the case of residents and non-residents with permanent establishments in Kenya, the tax shall be available for offset against their income tax liability for the year. The Finance Act 2020 introduced a digital services tax (DST) on income from services provided through a digital marketplace in Kenya at the rate of 1.5% on the gross transactional value. Executive summary. Minimum Taxable Income: KES 13,486.00 per month. Subsequently, the National Treasury has published the Tax Laws (Amendment) (No.2) Bill 2020 ("the Bill") which proposes to amend the Income Tax Act, chapter 470 laws of Kenya and the Value Added Tax Act number 35 of 2013. Amendments to the Income Tax Act, Chapter 470, Laws of Kenya (the ITA) 1. This followed by a publication of the Kenya Gazette Supplement No. The rate of CIT for resident companies, including subsidiary companies of foreign parent companies, is 30%. Exemption nullified Proposal retained Interest on any tax reserve certificates which may be issued by authority of the Government. (1) For the purposes of section 3 (2) (a) (ii) of this Act, an amount paid to—. Some of the measures comprised of lowering of the income tax and Value Added Tax (VAT) rates. Income tax Basis of taxation Income tax is charged on all the income of resident and non-resident companies, which has accrued in, deemed to be or is derived from Kenya. 25 April 2020. The Finance Act, 2020 amended the ITA to the effect of introducing Minimum Tax which will be payable at the rate of 1% of the gross turnover of a person effective 1 January 2021. This was a culmination of the budgetary process which began with the introduction of the Finance Bill, 2020 to Parliament on 6 May 2020. This Act may be cited as the Tax Laws (Amendment) Act, 2020 and shall come into operation, or be deemed to have come into operation on the date of assent. All the changes below become . The Finance Act 2020 introduced a digital services tax (DST) on income from services provided through a digital marketplace in Kenya at the rate of 1.5% on the gross transactional value. REPUBLIC OF KENYA KENYA GAZETTE SUPPLEMENT ACTS, 2020 NAIROBI, 30th June, 2020 CONTENT Act— PAGE The Finance Act, 2020 103 NATO AL COUNCIL FOR LAW Rt !NG REtE1V76.0 0 7 1.1 . Who will be affected Entities generating income through a digital marketplace/ e-commerce. The various tax incentives for new listings or introductions on an approved securities exchange have been eliminated. This Act may be cited as the Finance Act, 2020 and shall come into operation as follows— (a) sections 2, 3, 4, 5, 6, 7, 8, 9, 15 and 16, the 1st January, 2021; and (b) all other sections, on the date of assent. When Effective 18 March 2020 Corporate Income Tax Introduction Value Added Tax Excise Duty Contacts . There are a number of measures that the government can take to help . 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