There is reprieve as the monthly pension granted to Kenyans who are sixty-five years of age or more remained tax-exempt in the Finance Bill 2020.
The Kenyan National Assembly has adopted the Report of the committee of the Whole house meaning the bill has been adopted with Amendments.
The Bill had proposed to remove the exemption of monthly pension, granted to Kenyans who are sixty-five years of age or more, from tax. However, lawmakers argued that this will discourage saving into pension schemes.
The new bill, however, extends both the lower and upper limit of the residential rental income tax. The amendment will see the lower limit rise from Sh144,000 to Sh288,000 while the upper limit will rise from from Sh10 million to Sh15 million. Landlords who earn an annual rental income of between Sh288,000 and Sh15 million will both pay a tax rate of 10pc gross income.
The taxman will now have a new revenue source from agency fees paid for collecting revenue on behalf of the county government and government agency. KRA will be entitled to 2pc of all revenues actually collected on behalf of county governments or government agencies in the previous financial year.
Goods imported or purchased locally for the direct and exclusive use in the implementation of projects under special operating framework arrangement with the government shall continue being exempted for existing projects for the remaining period of the agreement.
The Bill also reduces the thresholds for excise duty for the some alcoholic drinks.
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