Government Spokesperson Isaac Mwaura has addressed the objectives and expected benefits of the proposed new tax laws.
Speaking on Monday, November 11, Mwaura stated that the proposal will spur digital economic growth.
“The proposed laws seek to expand the digital tax base, including services like ride-hailing, food delivery, freelance, and professional services under the definition of a “digital marketplace.” This move is essential in ensuring that digital service providers fairly contribute to the economy,” he said.
He stated that a tax would be levied on income derived from services provided by non-resident entities operating in Kenya’s digital marketplace.
This he said will ensure that foreign digital businesses contribute at fair rates and align Kenya’s tax system with global best practices.
Besides, Mwaura said the laws are aimed at fostering sustainable growth, safeguarding social equity, and improving Kenyans’ quality of life without disproportionately increasing the burden on the people.
Mwaura said the proposed tax reforms including the Tax Laws (Amendment) Bill, 2024, the Tax Procedures (Amendment) Bill, 2024, and other related bills, have been prepared to address the growing fiscal demands and ensure efficient revenue collection.
He emphasized that will ensure equitable and fair taxation, which includes measures for tax amnesty where justified and a reduction in tax expenditures that diminish revenue for essential services.
“This will allow the government to allocate more resources to critical projects that benefit all Kenyans,” he said.
He explained that the bills were subjected to extensive public participation, giving Kenyans a platform to express their views and propose recommendations on these measures.
Also Read: IMF Recommends Three Key Tax Reforms for Kenya After Approving Ksh78 B Loan
Mwaura Explains Other Benefits of the Amendments
He stated that the taxes will enhance county government funding to avert potential service delivery challenges at the county level.
Mwaura explained that the amendments include mechanisms for smooth county funding even in cases where the Division of Revenue and County Allocation Bills are delayed.
Additionally, he said the reforms are aimed at improving the economic welfare of all Kenyans, even in light of the national debt situation.
“Provisions for justified tax amnesty and adjustments to tax expenditures are expected to create a fairer tax environment,” he said.
He added that measures to combat tax evasion will help close fiscal gaps hence encouraging every Kenyan to contribute their rightful share to our nation’s growth.
Also Read: KRA Clarifies on Phones That Passengers Will Be Required to Pay Taxes For
Benefits for Kenyan Employees and Businesses
1. Improved Employee Benefits: The amendment proposes to raise non-taxable benefits, making allowances for meals, non-cash benefits, and gratuities more favourable for workers, directly impacting employees’ disposable incomes.
2. Support for Pension and Retirement Funds: Enhanced deductions for registered pension or retirement contributions will benefit both individuals and employers, allowing Kenyans to save more effectively for the future.
3. Health and Housing Benefits: Contributions to the Social Health Insurance Fund and Affordable Housing schemes are now deductible, aimed at increasing the take-home pay for Kenyan workers while promoting health and housing goals.
Follow our WhatsApp Channel and join our WhatsApp Group for real-time news updates.
