The government is now planning to restore some tax measures included in the controversial Finance Bill 2024.
The proposals which are classified under three bills namely the Tax Laws (Amendment) Bill, Tax Procedures (Amendment) Bill and the Public Finance Management (Amendment) Bill aim to address the fiscal deficit in the country.
The first proposal is the introduction of tax on infrastructure bonds which will be set at 5% on interest earned on resident investors unlike before where it was exempted from tax.
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Railway Development Levy will be increased from 1.5% to 2.5% with the aim of collecting more money to finance railway infrastructure projects.
Multinational companies with an annual turnover over Ksh.100 billion will be subject to a 15% minimum tax to ensure they pay fair contributions.
The Digital Marketplace Tax Expansion will now also include ride-hailing, food delivery, freelance, and rental services with the aim of broadening the tax base.
A 0.5% withholding tax will be introduced on public goods supplied by residents and 5% on non-resident sellers.
Replacing the previous 1.5% Digital Service Tax, the new tax rate is 6%, targeting non-residents earning income from the digital marketplace, aligning with international norms.
Annual pension contribution limits will rise from Sh240,000 to Sh360,000, or Sh30,000 monthly for employees and employers combined.
Kenyans who have remote jobs will also be required to get registered with KRA and submit the necessary taxes including the Housing Levy and SHIF as a measure of widening the tax base.
