The National Assembly passed the Finance Bill 2023 after 176 Members of Parliament voted in favor of the Bill while 81 per cent were against it.
The Bill which intends to raise a total of Ksh 289 billion worth of tax revenue in the next financial year will now proceed to its third reading which is the final stage after the recent amendments.
Some of the amendments include:
Initially, the government had proposed a three per cent contribution which would be refunded after seven years upon the request by the contributor. After the amendment, it was reduced to a 1.5 per cent tax rather than a contribution.
The Digital content creators’ tax was also reduced to five per cent from 15 per cent after the amendment.
Pay As You Earn tax (PAYE) is now at 32.5 per cent from 35 per cent for high-income earners( those earning above Ksh 500,000-800,000). A 35 per cent tax will be levied on those who earn over Ksh 800,000.
Rental income tax moved from 10 per cent to 7.5 per cent following the amendments. VAT on gaming and betting was also reduced from 20 per cent to 12.5 per cent.
Taxes that have been retained include the VAT on petroleum products which is still at 16 per cent and insurance compensation on taxable supplies which is at 16 per cent.
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Submissions of Withholding tax have been changed from 24 hours to 5 days. During the third reading, Members of Parliament will be presenting their individual amendments to different clauses of the Bill. Each Member of Parliament will be expected to take a vote for each clause.