The Finance Bill, 2024 was presented in Parliament on Thursday 9th May 2024. This newsletter covers the economic highlights of the proposed budget and tax changes as follows:

  • Introduction of taxation on motor vehicles at 2.5% on insured value, subject to a minimum of KShs. 5,000, and a maximum of KShs. 100,000
  • Introduction of minimum top up tax 
  • Repealing of DST and introduction of significant economic presence tax at an effective tax rate of 6%
  • Per diem to be revised on approved employer policy up to a maximum of 5% per day of the employee’s gross monthly salary
  • Non-taxable benefits threshold now increased to KShs. 48,000 per year from KShs. 36,000 and meal allowance limit now increased to KShs. 60,000 per year from KShs. 48,000 per year
  • Pension contribution limit has been increased to KShs. 30,000 per month (KShs. 360,000 per year) from KShs. 20,000 (KShs. 240,000 per year) 
  • Contributions paid for Affordable Housing Levy and SHIF to be an allowable deduction and not treated as a relief
  • Introduction of Advance Pricing Agreements(APA)
  • Removal of exemption from income tax on income earned by a registered family trust and CGT on transfer of property to a registered family trust
  • VAT registration threshold increased to KShs. 8,000,000 from KShs. 5,000,000
  • Time of supply for export of goods is when the exporter is in possession of all required export confirmation documents
  • Transfer of business as a going concern would also be made exempt from VAT
  • Supply of ordinary bread now proposed to be 16% from current zero rate
  • VAT proposal on financial services
  • Proposal for extension of time for the Commissioner to give an objection decision from 60 days to 90 days
  • Introduction of an Eco Levy to ensure manufacturers and importers pay for the negative environmental impacts of the goods
  • IDF to increase from 2.5% to 3% of customs value



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