Importers to pay 25% duty on glass, charge on capital expenditure

Kenya Revenue Authority has moved to impose a 25 per cent excise duty on imported glass bottles amid changes in business laws.

This, even as the taxman proceeds with the  implementation of new tax measures recently announced by President Uhuru Kenyatta.

The levy comes with the Business Laws (Amendment) Act, 2020, which amended the first schedule of the Excise Duty Act, 2015, by imposing excise duty on imported glass bottles.

It however excludes imported glass bottles for packaging of pharmaceutical products.

The Business Laws (Amendment) Act, 2020 has also  amended the Income Tax Act  to provide for investment deduction equal to 150% of  capital expenditure of at  least Sh5 billion, incurred  on the construction of bulk storage and handling facilities for supporting the Standard Gauge Railway operations .

This is an investment  of a minimum storage of 100,000 metric tonnes of supplies.

The move , KRA says , is in line with the measures taken by the government to  mitigate effects of COVID-19 which includes reduction of VAT from 16 per cent to 14 per cent with effect from April,1, 2020. 

“The change shall affect the VAT returns to be submitted after April, 2020,” deputy commissioner, marketing and communication, Grace Wandera said in a statement.

President Uhuru Kenyatta last month announced a number of measures to help cushion the economy and Kenyans from the impact of coronavirus, which has ravaged the global economy.

Apart from the cut on VAT, the President also declared 100 per cent tax cut for workers earning Sh24,000 per month.

He further directed that income tax (Pay-As-You-Earn) and resident income tax (corporation tax) be slashed from the current 30 per cent to 25 per cent.

Small business owners whose annual earnings do not exceed Sh5 million will receive a reduction in turnover tax from three per cent to one per cent.