The Kenya Revenue Authority (KRA) has started creating awareness to taxpayers on the amendments that have come through the Finance Act 2022 that was assented into law by the President in June 21, 2022.
The Act has amended various tax laws including: the Income Tax Act (ITA), the Value Added Tax Act (VAT), 2013 (VAT Act), Excise Duty Act, Tax Procedures Act, 2015 (TPA) and the Miscellaneous Fees and Levies Act.
The Act also provides other miscellaneous amendments to the Insurance Act, Retirement Benefits Act and Capital Markets Authority Act.
According to the Deputy Commissioner and Head of policy KRA Maurice Orayi the awareness is intended to ensure that compliance with the tax laws is high.
Orayi further notes that most of the amendments in the Finance Act are largely dealing with issues of procedures as well as some amendments to make sure the government revenue is protected and also to give some incentive to deal with the current economic situation that has been occasioned by the war in Ukraine and some recovery measures for Covid-19.
“Some of the key amendments are for example on how we need to be dealing with objections going forward; there are incentives that have been extended to the manufacturing sector,” he said.
“We are actually providing an environment that will enable Kenya to create a manufacturing plant for vaccines and the government is already negotiating with a number of companies to set base here so that we are able to manufacture basic medicine not only for Kenya but for the whole region,” said Orayi.
He noted that the incentives that specifically target manufacturers and even the agricultural sector are contained in the main law.
Orayi added that there are areas where the government has increased the rates of taxes; however this has not been put on basic products.
“You will note that within the petroleum sector we have reduced the rate of Value-added Tax (VAT) on Liquefied Petroleum Gas (LPG) by 50 percent. The rate is now at 8 % it used to be at 16%. We have also provided a number of incentives to the pharmaceutical sector including exemption of natural neutral spirit that are used in the manufacture of medicaments, and many others,” added Orayi.
KRA said that they will hold the sensitization across the country to bring clarity on the law, remove any dispute that might arise so that the taxpayers are actually aware of the content of the Finance Act 2022.
Orayi said it was very deliberate that KRA do not increase the burden of tax on the common Kenyan; thus they have increased taxes to items that are only for luxury like alcohol to about 10 percent.
He further clarified that the Finance Act did not increase or charge any additional tax of basic commodities like maize flour.
