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Key Insights on Major Proposals in Tax Law (Amendments) and Tax Procedures (Amendments) Bills, 2024.

The Tax Laws (Amendment) Bill, 2024 and Tax Procedures (Amendment) Bill, 2024 come following the rejection of the Finance Bill 2024 in an effort for the Government to revisit some of the provisions that had been proposed in the Finance Bill 2024. 

The Finance Bill 2024 had sought to introduce significant tax law changes which may have been the cause of public ow leading to its subsequent lack of assent. 

Here is a summary of the major proposed changes introduced in these amendment Bills:

Tax Laws (Amendment) Bill, 2024

Removal of the requirement to register retirement, pension, and provident funds with the KRA, and restrict registration of these funds to the RBA (Retirement Benefits Authority). (currently, these funds are required to be registered with both the RBA and the KRA but are exempt from income tax.)

Proposal to include the following incomes into the tax net:

  • Income or principal sum of a registered family trust
  • Income on the National Housing Development Fund,
  • Capital gain relating to the transfer of title of immovable property to family trust.

Proposal to introduce WHT on income on digital marketplace derived from being the owner or operator of a digital marketplace or platform such as digital content monetization, payment of goods, property, or services on digital marketplace. Digital marketplace, platform: any digital platform or website facilitating engagement between a service provider/seller and customer. At the rate of  20% for non-residents and 5% for residents.

Proposal to increase the pension allowable from Ksh. 20,000 per month to Ksh. 30,000 pm. Implication: employees may make an allowable pension contribution of up to 30,000pm.

Proposal to increase the allowable aggregate employment non-cash benefits (of whatsoever nature) from the current maximum of Ksh 36,000 to Ksh 60,000p.a.

Meal benefits for staff; allowable meal value proposed to be increased from the current Ksh. 48,000 p.a to Ksh 60,000 p.a.

Proposal to  introduced tax deductions on Affordable Housing Levy and Social Health Insurance Fund; tax deduction capped at Ksh. 15,000. Meaning that employees contributions made to as AHL & SHIF will not be taxed.

Relief of AHL (Affordable Housing Levy) and Post-retirement medical funds to be removed. Contributions from the AHL will be tax deductible and hence the removal of AHL relief.

Proposed changes on Excise Duty on the following:

  • Telephone & internet data services to increase from 15% to 20%,
  • Bank Money transfer charges to increase from 15% to 20%,
  • Mobile money transfer charges to increase from 15% to 20%,
  •  Fees on advertisement via the Internet and social media, introduce a 20% excise duty (currently not taxed),
  • Betting, gaming, prize competition, lottery to  increase from 12.5% to 15%.

Tax Procedures (Amendments) Bill, 2024

Proposed provision, Section 37E; to refrain the commissioner from assessing and collecting unpaid taxes —-this will allow for relief and abandonment of unpaid taxes because of doubt or difficulty in recovery.

Requirements of a valid electronic tax invoice: proposed alternative invoicing method for small businesses with turnover not exceeding Ksh. 1M, where a supply is from a small business, the purchaser may issue a tax invoice and not necessarily an eTims compliant invoice.

Proposed extension of Amnesty on interest, penalties, and fines on tax debt where the principal tax had been paid before 31st December 2022, and where the principal tax has not been paid, the amnesty program is proposed to extend to 30th June 2025 (the tax period under consideration has not changed, it is the period up to 31 December 2022).

Proposal to exclude Saturdays, Sundays, and public holidays from computation of time for purposes of :

  • Submission of tax returns, applications, or other documents,
  • Payment of tax,
  • Any other actions under a tax law.

Proposed; PIN requirement for employees remotely working outside Kenya for an employer based in Kenya.

How we may help you?

When tax laws and regulations change, it is imperative that businesses consult with tax consultants to understand how such changes might affect them in terms of whether any tax rates have been impacted, or if the changes present any tax opportunities they could leverage. 

Book a meeting to speak with a consultant;

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Jackie.W. Murage

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As an Associate-Corporate Services, Jackline leads client relations, helping organizations develop strong corporate strategies. She brings relevant experience in the role of helping clients develop and implement corporate goals and objectives, formulate corporate strategies around their capital resources, achieve optimal strategic mix, and sustain a healthy risks-return balance.

Jackline holds a Bachelor’s Degree in Business Management; Finance and Banking from Maasai Mara University

Diana Kiarie

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Diana serves as the Manager of Accounts and Financial Reporting and holds a Bachelor’s degree in Commerce with a specialization in Accounting from Mount Kenya University. Additionally, she possesses a diploma in Business Management from the University of Nairobi. Currently pursuing CPA
Advanced Level, Diana has over five years of experience in finance, accounting, audit, and taxation for the firm, significantly enhancing strategic financial management activities.

CPA Gitau Nahashon

Senior Managing Partner

CPA Gitau Nahashon is an accomplished finance and accounting professional with over 21 years of experience in the fields of accounting, tax, audit, advisory, corporate governance, and business consultancy. Nahashon is the founding partner of GK Nahashon & Company, a rapidly growing medium-sized audit firm located in Rosslyn, Limuru Road.

He is a member of the Institute of Certified Public Accountants of Kenya (ICPAK), Kenya Institute of Management (KIM), and the Institute of Internal Auditors Kenya Chapter (IIA). CPA Nahashon is a passionate accountant, financial analyst, tax litigant, and advisor as well as corporate finance advisor. All this emerges from his background of Bachelor of Commerce, Finance, and Accounting as well as his professional training as a Certified Public Accountant (CPA-K) coupled with his many years of hands-on experience. He is a licensed practicing auditor and consultant with the Institute of Certified Public Accountants of Kenya. He is an MS Excel enthusiast having trained several high-ranking finance professionals in financial modeling, forecasting, and reporting using sophisticated Excel functions and formulae.

CPA Nahashon is a certified QuickBooks pro advisor, a position he uses to offer support in QuickBooks online as well as advise clients on the usage of QuickBooks for their accounting, payroll, and inventory management. This certification increases the confidence that clients have in our expertise in automated accounting software.

CPA Nahashon is extremely zealous of compliance, he has worked for several employers and private clients shepherding them to remain compliant with the regulations, policies, and guidelines of various regulators. As a risk and compliance professional, CPA Nahashon has brokered many deals and structured compliance highways for many organizations.

CPA Nahashon has enjoyed a thriving career in the private sector where he served in various capacities within the manufacturing, real estate, educational, and banking sectors. His major accomplishments include overseeing effective system migration, automation of MIS, conducting gap analysis for new CBK guidelines, successful acquisition structure, corporate governance training, financial reporting, training advanced MS Excel, successful audit engagements, setting up a successful microfinance company, several successful funding proposals among others.

This professional accountant has held the hands of many start-ups until they are mature with huge turnovers. He has mid-wifed micro enterprises to become medium-sized entities some of them with balance sheet of over Kshs 1B. He has successfully transitioned chamas to birthing enterprises that are current industry and market leaders.

He has served in various boards of academies, schools, SME’s and serves in advisory board of a thriving business in the service industry. He is currently a board chairman in one of the SME’s he serves as an independent director. He is an astute leader with impeccable people leadership skills and serves the community in several leadership positions transforming lives and offering hope to the destitute.