[ad_1] Fresh Tax Changes Taking Effect in 2020 To Watch Out For By Virginia Mwangi / January 11, 2020 | 9:00 am Of all the previous years, 2020 has presented itself as the year that will crush the remaining standing Small and Medium Enterprises with the introduction of taxes, hike in school fees and the National Health Fund (NHIF).
A number of tax changes came to effect on 1st January 2020 after the Finance Bill was signed on the 7th of November 2019 and are bound to great effect businesses and Kenyans in general.
The implementation of the new tax changes will be coming at a time a big number of companies are closing down the business and firing all their employees hence making it unbearable for most of them. Import Declaration Fee levy has been increased from 2 percent to 3.5 percent
Railway Development Levy, which is an important component of paying for the SGR, has been increased from 1.5 percent to 2 percent
Taxes will go up for cigarettes, electronic cigarettes, fruit wines, and spirits.
Motor vehicle excise taxes will go up from 20 percent to 25 percent for cars over 1500 cc, and that for station wagons and race cars go up from 30 to 35 percent, but for electric-powered motor vehicles, that goes down from 20 to 10 percent.
Sports betting companies take another hit with a 20 percent tax lopped on to each bet amount, regardless of the outcome of the wager
New economy taxes: The new year ushers in taxes on the digital economy market place – this encompasses “platforms that enable interaction between buyers and sellers of goods & services through electronic means” who are now liable for income tax and value-added tax (VAT).
The turnover tax of 3 percent has been reintroduced and will be payable monthly by any person whose turnover does not exceed 5 million shillings in any year. Companies that list under the Nairobi Securities Exchange’s GEMS program for the next three years can be forgiven tax penalties and interest, provided they pay the principal amount. This move to encourage listing at the NSE became effective in November 2019. But if they delist within five years, that window lapses and all taxes due before listing will again become payable.
Real Estate Investment Trusts (REITs), which were exempt from corporate tax are now also exempt from income tax.
There is an income tax exemption for people who register under the Government’s Ajira Digital program from January 2020 to December 2022. Green bonds Interest income on all listed infrastructure bonds, or green bonds, that are a minimum three years to maturity will be exempt from income tax as will income on the National Housing Development Fund. Environmental Material Plastic recycling companies will get a preferential corporate tax rate of 15 percent for five years and machinery and equipment used for plastic recycling plants are now VAT exempt.
Equipment for the development of solar and wind energy, including batteries, which were previously exempt from VAT, will now require the Cabinet Secretary for Energy to approve any such exemptions. READ : Njenga Karume’s Jacaranda Hotel To Be Auctioned On January 22 More Articles From This Author [ad_2] Source link