President Uhuru Kenyatta on Saturday signed into law the Tax Laws (Amendment) Bill, 2020 to cushion the economy and residents against the pain of the Covid-19 pandemic.
The Bill.has amended tax-related laws including the Income Tax Act (CAP 470), the Value Added Tax Act of 2013, the Excise Duty Act (2015), the Tax Procedures Act (2015), the Miscellaneous Levies and Fees Act (2016) and the Retirement Benefits Act(1997).
The amendments include the rise in the threshold for turnover tax to between Sh1 million and Sh50 million to exclude small-scale traders from the presumptive tax. The new law further lowers turnover tax rate from three to one per cent.
President Kenyatta said the amended law, which mainly targets low-income earners, includes a 100 per cent Pay As You Earn (PAYE) tax relief for employees earning less than Sh24,000 per month.
Those earning above the new threshold will benefit from a PAYE tax reduction of 25 to 30 per cent.
The Act has also revised the Corporation Tax to 25 per cent, while the Non-Resident Tax on Dividends has been adjusted from 10 to 15 per cent.
The President said the law also lowers the Value Added Tax rate from 16 to 14 per cent, a move expected to lower the shelf prices of basic commodities.
The nAct has amended Section 38 of the Retirement Benefits Act (1997) to allow access to retirement benefits to buy a residence. This is aimed at increasing homeownership as envisaged in the housing pillar of the Big 4 agenda.
The Bill was passed by Parliament on Wednesday.
Present during the brief signing ceremony were National Assembly Majority leader Aden Duale, National Treasury Cabinet Secretary Ukur Yatani, Solicitor General Ken Ogeto, State House Chief of Staff Nzioka Waita, National Assembly Clerk Michael Sialai and State House Deputy Chief of Staff Njee Muturi.
(Edited by V. Graham)
