NAIROBI, Kenya, Jan 7 – The Kenya Revenue Authority (KRA) says it will not suspend the implementation of the Capital Gains Tax, insisting it is prepared to implement the new tax.
KRA Commissioner General John Njiraini said on Wednesday that they shall continue to engage with stakeholders to iron out any uncertainty, following complaints from stockbrokers who urged the government to suspend implementation of the tax.
“It has become apparent that the stock market players appear to lack clarity on implementation of the law and it has been reported in the press that they are not complying with the law; KRA has issued guidelines that highlight key elements of clarity to various stakeholders,” he said.
He clarified that it’s the responsibility of the stockbroker or agent handling the sale and transfer of bonds and shares to collect and account for the Capital Gains Tax on the stock market transactions.
“The law is very clear on the role of stock brokers and the eighth schedule that states a stockbroker who conducts the transfer of investment of shares on behalf of a transferor shall collect and remit tax to the commissioner,” he stated.
Njiraini warned that brokers will be liable for any taxes that they fail to collect as from January 1, 2015 when the tax became effective.
On real estate, Njiraini says that Capital Gains Tax will be collected by KRA concurrently with Stamp Duty during the property transfer process.
He says that engagements are currently ongoing with the Lands Ministry to streamline the Stamp Duty and the Capital Gains Tax collection process to avoid delays in conclusion of property transfer transactions.
Investors will pay a five percent tax on the gain of selling stock less transaction costs with property such as land and treasury bonds to also be taxed.
The taxman is also developing an electronic; module that will allow property transfers to be transacted online through iTax platform.