The realization of the Tax Amendment Act and the Tax Procedures Act by the current president Mr. William Ruto on 11th December last year has prepared a ground for the realization of some remarkable revolution in the Kenyan tax system.
These changes came into force starting from December 27th 2024, and include some of the changes made on: Income Tax Act, Value Added Tax Act, Excise Duty Act, Miscellaneous Fees and Levies Act and the Tax Procedures Act).
The amendments to the laws are anticipated to lift the VAT and excise duties that makes the consumer products and business expenses more expensive.
Retirees will also feel the heat since the 15% relief on contributions to post-retirement medical funds where the maximum contribution was Ksh.60,000 has been removed leaving them to pay the total amount.
Salaried Kenyans are preparing to see a new cut starting from February as the contribution to National Social Security Fund (NSSF) will go up from the current 200 Universal Basic payroll deductions to 400 Universal Basic effective from the provisions in the NSSF Act of 2013.
This will also transform the digital sector fundamentally. The previous digital service tax was substituted by significant economic presence tax, which rises from 1.5% to 3% of turnover.
Also, a withholding tax of 5% on digital platform revenue base was a possible way to lessen the profit of players in that sector.
The government has been encouraged the Kenyans to seize the opportunity of the tax compromises, despite the experts advising that the following years difficult times for everyone economically