M-Wakili

CONTACT

FAQ

LOGIN

REGISTER

Ask a lawyer:
summarize all sections of the finance bill 2024

The Finance Bill 2024 introduces several significant changes to Kenya's tax framework. Below is a summary of the key sections and their implications:

Income Tax

  • Repeal of Exemptions: The Bill proposes to repeal the income tax exemption on interest income earned from all listed bonds, notes, or other similar securities. This change aims to broaden the tax base and increase government revenue.

    • Source: Global Tax News ↗

  • Gratuity Exemption: Section 5 of the Income Tax Act (ITA) exempts gratuity paid to pension funds up to KES 240,000 per year of service. The exempted amount is now subject to review.

Value Added Tax (VAT)

  • Scrapping of VAT Exemptions: The Bill proposes to remove certain VAT exemptions in the manufacturing and construction sectors. This move is expected to increase the cost of goods and services in these sectors but will also boost VAT collections.

Withholding Tax

  • Non-Resident Suppliers: The Bill introduces changes that will likely increase the cost of goods supplied by non-resident suppliers due to the withholding tax deducted in Kenya. This may not be creditable in the supplier's home country, leading to higher costs.

Corporate Income Tax

  • Branch Tax Rate: The corporate income tax rate for branches is reduced from 37.5% to 30%, effective from the 2024 year of income. This reduction aims to make Kenya more attractive for foreign investment.

Implementation Dates

  • Effective Dates: Various sections of the Bill will come into effect on different dates, with some changes taking effect from 1st July 2024.

Economic Impact

  • Growth Projections: The Bill is part of broader policy measures supporting projected economic growth of 5.5% for 2023 and 2024, driven by private sector growth, service sectors, and agriculture.

Additional Provisions

  • Mandatory eTIMS Invoices: Amendments to Section 23 of the Tax Procedures Act will mandate the issuance of eTIMS invoices, enhancing tax compliance and revenue collection.

These changes reflect the government's efforts to enhance revenue collection, broaden the tax base, and support economic growth through strategic fiscal policies.

Sources:

Answered by mwakili.com