The Finance Bill 2023 is a bill that proposes a number of changes to finance and tax laws in Kenya. The most discussed proposal is a 3% tax on the salary of each individual that will go to the national housing development fund. Below is a summary of what is contained in the finance bill of 2023.
Finance Bill 2023 Tax Proposals
- Turnover Tax (TOT) will be increased from 1% to 3% on gross sales.
- Turnover Tax (TOT) will be lowered to target businesses with a turnover of KES 500,000 annually from previously KES 1,000,000.
- Digital content creators will pay a 15% withholding tax on each payment they receive or earn.
- People who earn above KES 500,000 and above will pay a 35% pay-as-you-earn tax
- Digital assets tax of 3% will be introduced as transfer charges for digital assets like cryptocurrencies, and NFTs.
- Members’ clubs and associations will now be subjected to tax
- VAT on petroleum products to be increased from 18% to 16%
- All providers of imported digital services must register for VAT.
- Human hair, wigs, eyebrows, artificial nails, etc to pay a 5% excise duty
- Mobile money transfer services excise duty to increase from 12% to 15%
- Excise duty on all forms of gambling and price competitions to increase from 7.5% to 20%.
- Any fee charged on digital loans or lenders to be subject to a 20% excised duty.
- 3% of gross earnings will be deducted to go to National Housing Development Fund
- Taxpayers to deposit 20% of the tax in dispute to KRA as they wait for the outcome of the Tax Appeals Tribunal decision
The government says that it is introducing the new taxes to increase government revenues
The Finance Bill 2023 is currently being debated in the National Assembly. It is expected to be passed into law by the end of June 2023.
Download the full pdf of the Finance Bill 2023
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