Key Tax Implications of the fiscal Budget FY 2018-19
PAYE;
•The proposal to introduce a 35% tax rate on individuals earning more than KES 750,000 per month under the draft Income Tax Bill 2018 has been dropped. The current top rate of 30% will be maintained.
•Amendment of the Employment Act to introduce a 1.0% contribution on employee’s gross monthly salary and a matching contribution by the employers to go into the National Housing Development Fund.
Presumptive tax Income;
Presumptive tax of 15% of the business permits or license fee introduced for businesses whose turnover is below KES 5 Million per annum. • Does not apply to corporate entities; rental income or income from management and professional services.
Tax Administration;
Late payment interest increased from 1% to 2%.
• Late payment penalty of 20% re-introduced.
• Late filing penalty for individuals reduced to 5% of tax due or KES 2,000 whichever is higher.
• Applications for extension of due dates for tax returns filing to be made at least 15 days before due date for monthly returns and 30 days for annual returns and Commissioner to respond at least 5 days before due date.
Late filing penalty for income tax returns:
• For corporate bodies, the penalty will be 5% of tax payable or KES 20,000, whichever is higher, whereas for individuals, the penalty will be 5% of tax payable or KES 2,000, whichever is higher.
• Limited grounds for waiver of penalty or interest, i.e. hardship or equity, impossibility or undue difficulty or expense of recovery
Value Added Tax;
VAT exemption introduced on the following items
• Equipment for the construction of grain storage facilities.
• Additional raw materials for the manufacture of animal feeds.
• Parts imported or purchased locally for the assembly of computers.
•Taxable value of mobile cellular to be determined in accordance with the VAT Act.
• Late filing penalty to be moved from the VAT Act to the Tax Procedures Act but penalty remains the same.
•Wheat and barley seed which are currently VAT-able to be exempt.
•Maize (corn) seed to be subject to VAT.
•Garments and leather footwear manufactured in an EPZ to be VAT-able upon importation.
•Transportation of cargo to destinations outside Kenya to be deleted from exempt schedule.
•Alcoholic and non-alcoholic beverages supplied to DEFCO to be exempt.
•Exemption of goods and services for direct and exclusive use in projects under special operating framework with the Government.
•Exemption of postal services (postage, rental of post boxes and mailbags).
Post vitu kama izi badala ya kutusi watu ovyo ovyo nikama uko na “hedhi”.
…mcoondu wa kisenge tena mweusi na ulioparara wewe
Naije @Penileson Arseon Mcoosh
HARAM!!! kazi ni kufikiria sehemu za nyumza za wanaume wenzio …bure kabisa.
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