This archive report was first published on 23 April 2020.
On April 23, 2020, Parliament approved amendments to the tax law to mitigate the effects of the COVID-19 pandemic on Kenyans and businesses.
The amendments, contained in the Tax Bill, 2020, were signed into law by President Uhuru Kenyatta and published in the Kenya Gazette, paving the way for proposals to fight COVID-19 to take effect.
Key measures include exempting individuals earning less than KSh 24,000 per month from income tax, reducing the Corporation Tax rate from 35 percent to 25 percent, and increasing the threshold for turnover tax from KSh 500,000 to KSh 1 million.
Small-scale traders have been excluded from the turnover tax threshold, and the rate has been reduced from 3 percent to 1 percent.
Personal relief has been increased from KSh 16,896 to KSh 28,800, and individual rates of tax have been reduced, with the top tax rate reduced to 25 percent.
Parliament also amended the VAT Act to retain essential items such as milk and milk products, bread, and face masks at zero rate.
Additionally, the law has been amended to exempt entry fees into national parks and game reserves and services of tour operators from tax.
However, the Parliamentary Committee rejected a proposal to exempt stock brokerage services from Value Added Tax (VAT), arguing that the sector had come of age and continued exemption was denying the government tax revenue.
