President Uhuru Kenyatta on Wednesday signed the Tax Amendments and Tea Bill of 2018 into Law. The two new laws will adjust tax to pre-Covid levels and offer relief to tea farmers in the country.
On one hand, the Tax Amendments will bring back Value Added Tax (VAT) to 16% from 14% to increase tax collections, expanding collections by at least Ksh 78 billion between 1 January and June 30 2021.
Tax Amendments
The Tax Amendments will also raise corporate tax to 30%, up from 25% set to cushion companies from blows of the pandemic, as well as adjust PAYE and Individual income tax to pre-pandemic levels.
On December 22nd, Parliament approved plans to revert to readjust tax relief measures instituted in April 2020 in light of the pandemic, which caused a revenue shortfall of ksh 122 billion.
READ ALSO: Kenya’s Parliament nods Bill to hike VAT, Individual and Corporate tax in 2021
On the other hand, the signing of the Tea Bill of 2018 will institute reforms in the country tea sector. Some of the reforms in the new law include faster payments for tea farmers and the re-engineering of the Kenya Tea Board, which will ease the exploitation of farmers by Brokers. The law will also fix management fees and levies by factories.
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