The proposed financial bill, which was presented to the national assembly a month ago for amendments, provides numerous tax reforms to be implemented once the bill becomes law. Through the finance committee, the government started a public hearing process to gather views and opinions from Kenyans, with the most interesting area of consideration being the introduction of the national housing development fund in the coming financial year.
However, Kenyans need to understand the implications of the other tax reforms proposed in the bill and raise their concerns as the public hearing process ends.
Read more: Impact of Finance Bill 2023 On Taxpayers
Some of the tax reforms in the proposed financial bill-2023 that require as much attention as the housing fund include:
- Introduction of a 5% withholding tax on advertising and marketing services offered by people residing in the country. This is an addition to the existing 20% paid by non-residents.
- A 15% withholding tax on digital content creation, that is, earnings from social media platforms, blogs, and advertising websites
- Reduction of the minimum threshold requirement for turnover tax from Kshs. 1 million to Kshs. 500,000 and a corresponding increase in the turnover tax to 3% from the existing 1%.
- A 20% tax rate for betting, lottery, and fees earned by digital lenders from the existing 7.5%
- 3% increase in the tax rate on the fees charged for mobile transactions from the existing 12%
- The tax rate for petroleum products will double to 16% from the existing 8%.
Although the bill tries to balance these reforms by reducing tax rates in other sectors, it is evident that the government is more focused on increasing the tax base in its endeavour to achieve a budget of KES 3.6 trillion in the upcoming fiscal year.
This calls for the public to put more weight on these reforms and provide opinions to the government on the same, as they also focus on the housing fund. Upon approval by the national assembly, the budget will be read in June and passed into law.
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