This archive report was first published on 11 June 2020.
On June 11, 2020, Treasury Cabinet Secretary Ukur Yatani delivered the budget speech for the 2020/2021 financial year, outlining proposed tax measures that may impact Kenyans.
The Finance Bill has proposed to reintroduce a 14 per cent VAT on liquefied petroleum gas (LPG), inputs or raw materials for electric accumulators, helicopters, and tractors, among others.
According to KPMG, the proposed VAT charge on LPG will increase the price of cooking gas, contradicting government efforts to shift consumers from wood fuel to LPG to conserve forests.
The alcohol industry is also set to suffer as more excise duty is loaded on spirits. The Bill also creates the National Roads Toll Fund, with tolls collected remitted to this Fund.
Retirees may also be affected, as income from the National Social Security Fund will be subject to tax.
Mr. Yatani has also indicated plans to introduce a digital service tax, payable on income derived or accrued in Kenya through a digital market place. This will result in a 1.5 percent digital services tax on the gross transaction value, payable when making payment to the service provider.
The Treasury CS plans to increase the upper cap for residential income subject to the 10 per cent tax rate from Sh10 million to Sh15 million.
