This archive report was first published on 20 November 2019.
President Uhuru Kenyatta recently assented to the Finance Act, 2019, which removed the proposal to introduce withholding taxes on services such as cleaning, security, sales promotion, marketing, catering, transport, and advertising.
According to the Finance Act, 2019, which was assented to on November 20, 2019, the removal of the taxes will benefit employers in these sectors, often contractors of bigger firms, as well as unskilled employees who earn a monthly salary of between Sh7,000 and Sh16,000.
Former National Treasury Cabinet Secretary Henry Rotich had proposed to expand withholding tax by introducing the levy, citing the need to mobilise resources by expanding the tax base.
However, Rotich noted that the expansion of withholding tax would not include management and professional fees.
Law firm Bowmans welcomed the removal of the proposal, but noted that taxpayers will hope that the scrapping of the measures will be followed by alignment with Kenya Revenue Authority's internal policy.
