The Finance Bill, 2023 was presented in Parliament on Thursday, 4th May 2023.  This newsletter covers the economic highlights of the proposed budget and tax changes as follows:

  • Introduction of taxation on digital tax assets
  • Restriction of interest on foreign exchange losses
  • Proposal to include a new pay-as-you-earn (PAYE) tax bracket of 35% for any employment income above KShs. 500,000 per month
  • Proposal to reduce the income tax rate on monthly rental income and withholding on rental income from 10% to 7.5%
  • Proposal to increase the Turnover Tax rate from 1% to 3% and to alter its bracket to KShs. 0.5 million – KShs. 15 million
  • Exported taxable services are now proposed to revert to exempt from VAT
  • Transfer of business as a going concern would also be made exempt from VAT
  • Removal of provision on application of waiver of penalty and interest
  • Increase in tax shortfall penalty on deliberate omission from 75% to 200%
  • Reduction of the rate of IDF from 3.5% to 2.5% of customs value and RDL from 2.5% to 1.5% of customs value
  • Introduction of a new Levy on specified goods; the Export and Investments Promotion Levy
  • The Bill proposes to introduce a 20% deposit requirement for taxpayers appealing to the High Court from the Tax Appeals Tribunal refundable if the High Court decides in favour of the taxpayer

CLICK HERE TO DOWNLOAD THE FULL ARTICLE

Author

Overview of the Finance Bill, 2023
Ashif Kassam
Executive Chairman