NAIROBI, Kenya Dec 11 – President William Ruto has signed into law the Tax Laws (Amendment) Bill, 2024, proposed by National Assembly Majority Leader Kimani Ichung’wah.
The tax laws bill was seeking to amend the provisions of four Acts of Parliament, including the Income Tax Act, the Value Added Tax Act, the Excise Duty Act, and the Miscellaneous Fees and Levies Act, to provide tax reliefs to employees and retirees, hence enhancing employees’ benefits.
The new tax laws seek to enhance the local manufacturing sector, agricultural sector, and government’s housing and settlement plan, as well as trade between Kenya and other states.
The amendments to the Income Tax Act will now allow the Affordable Housing Levy (AHL) and contributions to post-retirement medical funds to be deducted from the tax liability that is payable.
This will help address the challenges of double taxation, allowing taxpayers to enjoy the full benefits of their Affordable Housing Levy and post-retirement medical funds contributions.
The new income tax further provides that payments of pension benefits from registered funds to individuals upon reaching retirement age will be tax-exempt.
This will allow individuals who retire early due to health reasons or withdraw from the fund after 20 years of membership to be exempted from taxes on their pension benefits.
The amendments to the Miscellaneous Fees and Levies Act will exempt goods originating from the African Continental Free Trade Area from export and investment promotion levies to promote free trade across the continent, aligning with the conventions ratified by Kenya in promoting the African Continental Free Trade Area.
Under the amendments to the Value Added Tax Act, the new law now exempts the transfer of a business as a going concern from VAT. Currently, VAT is applicable on such transfers at the standard rate of 16 percent.
Additionally, the amendments to the Excise Duty Act now empower the Cabinet Secretary for the National Treasury to exempt spirits made from agricultural products in Kenya from excise duty in a bid to support local production.
Also, locally assembled electric vehicles and licensed incubators will be exempted from the excise duty.
