New Kenyan Taxes Coming Into Effect In 2023
The Kenya Revenue Authority (KRA) hopes to collect more taxes following the implementation of the tax amendments enacted by the Finance Act 2023 for the 2022/2023 fiscal year on January 1.
During the last budget reading, former Treasury CS Ukur Yatani announced a number of tax measures designed to assist KRA in achieving its revenue collection goals for the current fiscal year.
The capital gains tax will increase from 5% to 15%, and bank transactions will once again be subject to an excise levy.
“What these taxes will do is give us access to individuals and corporates with high net worth transactions like the ones that trade in land stocks and securities. This will increase their share of tax deductibles,” KRA Digital Tax Manager Nickson Omondi told Citizen TV.
With these modifications, the tax collector is certain that the Ksh.2.1 trillion revenue collection target established by the National Treasury for this fiscal year would be met.
Omondi stated, “With these additional revenue streams, we will reach the target set by the national treasury.”
However, according to specialists in the field, the most the tax collector can achieve with the new revenue streams is this year’s planned goals.
“With all the revenue that is coming to KRA the best they can realise is this year’s target and not more than that. Talk of doubling tax collections in the next two years is next to impossible if you ask me,” Samuel Kumu, a Tax Expert at Rödl & Partner, said.
The reintroduction of fees on mobile-to-bank transactions and vice versa is accompanied by the imposition of an excise levy of 20% on these transfers.
“This will come out of the transaction cost that is usually charged by banks to consumers and not on the actual amount of money that is being transacted,” said Omondi.
Following the implementation of the value-added tax legislation in 2022, online services, including e-books, streaming services such as Netflix and Spotify, and videoconferencing, will be subject to 16% VAT.