RSMEA Newsletter - Overview of the Tax Laws and Tax Procedures Amendment Acts, 2024

Introduction

The Tax Laws (Amendment) Bill, 2024, the Tax Procedures (Amendment) (Number 2) Bill, 2024 and the Business Laws (Amendment) Bill, 2024 were presented to the National Assembly in November 2024. The same were assented to by the President on 11th December 2024. Whilst the Bills did not specify the effective date, the Acts commence on 27th December 2024 (14 days after 13th December 2024 which was the date of gazettement). All the provisions of these Acts are effective from 27th December, 2024.
 

The Acts seek to bring about changes to the Income Tax Act, Value Added Tax Act, Excise Duty Act, Miscellaneous Fees and Levies Act and Tax Procedures Act.
 

Some of the key changes include:

• Extension of the amnesty to 30th June 2025 and the applicable period to 31st December 2023
• Contributions paid for Affordable Housing Levy and SHIF to be an allowable deduction and not treated as a relief
• Introduction of minimum top up tax 
• Repealing of DST and introduction of significant economic presence tax at an effective tax rate of 3%
• Non-taxable benefits threshold now increased to KShs. 60,000 per year from KShs. 36,000 and meal allowance limit now increased to KShs. 60,000 per year from KShs. 48,000 per year
• Pension contribution limit has been increased to KShs. 30,000 per month (KShs. 360,000 per year) from KShs. 20,000 (KShs. 240,000 per year) 
• Removal of exemption from income tax on income earned by a registered family trust 
• Transfer of business as a going concern would also be made exempt from VAT
• Reintroduction of the Commissioner’s powers to abandon the collection of taxes
• Increase of RDL to 2.0%

Our latest newsletter breaks down the assented changes to the Income Tax Act, Value Added Tax Act, Excise Duty Act, Miscellaneous Fees and Levies Act, Tax Procedures Act and their potential impact on your business.

Caveat

This newsletter has been prepared by RSM (Eastern Africa) Consulting Ltd, and the views are those of the firm, independent of its directors, employees and associates. This newsletter is for general guidance, and does not constitute professional advice. Accordingly, RSM (Eastern Africa) Consulting Ltd, its directors, employees, associates and its agents accept no liability for the consequences of anyone acting, or refraining from acting, in reliance on the information contained herein or for any decision based on it. No part of the newsletter may be reproduced or published without prior written consent. RSM (Eastern Africa) Consulting Ltd is a member firm of RSM, a worldwide network of accounting and consulting firms. RSM does not offer professional services in its own name and each member firm of RSM is a legally separate and independent national firm.