Full list of Tax amendments proposed by CS Yattani in 2020/2021 budget

Tax amendments in 2020/2021 budget

Treasury CS Ukur Yattani during the reading of Kenya's 2020/2021 budget at the National Assembly on June 11, 2020

Treasury Cabinet Secretary Ukur Yattani on Thursday tabled Kenya's 2020/2021 Budget Statement at the National Assembly.

In his address, CS Yattani highlighted a number of proposed tax amendments for the members of parliament to consider and possibly approve.

The CS was keen to maintain import duty on products that are locally manufactured in order to prevent unfair competition from cheap imports.

He also proposed a new Digital Services Tax to guide in the collection of revenue from businesses conducted via the internet.

CS Yattani explained that the new measures were expected to generate Sh38.9 billion in revenue for the exchequer.

Tax Exemptions

The following items were listed to now be duty free under the East African Community Duty Remission Scheme.

  1. Imports of products used to manufacture baby diapers as well as imports of products used in the textile and apparel sector.
  2. Imports of items used in manufacture or assembly of mobile phones
  3. Raw materials for the manufacture of masks, sanitizers, ventilators and PPEs
  4. VAT exempt on maize/corn seeds
  5. Ambulance services added to medical, nursing and dental services exempt from VAT
  6. Imports development fee and railway levy on imports by the Kenya Defense Forces and the National Police Service
  7. Roads toll for entities involved in pubic-private partnerships

Revised Taxes

  1. 35% import duty maintained on imported metal and alloy
  2. 25% import duty on paper and paper-board products
  3. Leather and textiles maintained import duty at 25%
  4. 35% import duty on electrical parts and accessories instead of 25% imposed in the 2019/2020 budget
  5. Rental Income Tax at 10% for individuals earning an annual rental income of Sh10 million revised upwards to cover individuals earning annual rental income of Sh15 million and below
  6. 1.5% Digital Services Tax on the value of transactions conducted by online businesses
  7. Minimum tax of 1% of gross turnover to all companies that continue to declare losses year-in year-out

The CS also proposed a Voluntary Disclosure Programme which will ran for three years to allow Kenyans who may have not declared their taxes over the last five years to report themselves and pay the taxes due without penalties.

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