Government to Introduce Tax of These Education Services, Ndung’u
The National Treasury is considering the introduction of taxes on certain school services that are not directly related to education. In their Medium-Term Revenue Strategy (MRTS) for the Financial Year 2024/25 to the Financial Year 2026/27, they noted that tax exemptions on education services vary due to differences in fees and services among schools.
The Treasury highlighted that the blanket exemption from Value Added Tax (VAT) on education services, including those offered by schools, creates inequality. They specifically mentioned services like swimming, which, when offered outside of school, are subject to VAT.
The aim of this tax proposal is to address this disparity and impose VAT on these additional services. It’s part of the government’s efforts to close tax evasion loopholes and improve taxpayer compliance.
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Treasury Cabinet Secretary Njuguna Ndung’u emphasized that revenue from this education tax and other new taxes introduced through the MRTS will support the government in implementing its development agenda.
The document also mentions that the threshold for these services will be explored, suggesting that not all school-related services may be subject to the proposed tax.
Additionally, the Ministry of Finance has proposed the taxation of insurance services at a general rate and the removal of the threshold for applying the VAT input tax apportionment formula.
Government to Introduce Tax of These Education Services, Ndung’u
