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Uhuru signs law for major tax reliefs amid Covid-19 pandemic

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NATION REPORTER

By NATION REPORTER
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President Uhuru Kenyatta on Saturday signed into law the Tax Laws (Amendment) Bill, 2020 as part of measures to cushion the public against effects of the Covid-19 pandemic.

The bill published on March 30 amends tax-related laws including Income Tax Act (CAP 470), Value Added Tax Act of 2013, Excise Duty Act (2015), Tax Procedures Act (2015), Miscellaneous Levies and Fees Act (2016) and Retirement Benefits Act, 1997.

Amendments include a rise in the threshold for turnover tax to between Sh1 million and Sh50 million so as to exclude small-scale traders from the presumptive tax.

The new law further lowers the turnover tax rate from three to one per cent.

The law, which mainly targets low-income earners, includes a 100 per cent Pay As You Earn (Paye) tax relief for employees earning less than Sh28,000 per month.

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The previously announced threshold was Sh24,000.

Those earning above the new threshold will benefit from a Paye tax reduction of between 30 and 25 per cent.

The law has revised the Corporation Tax to 25 per cent while the Non-Resident Tax on Dividends has been adjusted from 10 to 15 per cent.

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It lowers the Value Added Tax rate from 16 to 14 per cent, a move that is expected to lower the shelf prices of basic commodities.

The law has amended Section 38 of the Retirement Benefits Act (1997) to allow access to retirement benefits for purposes of purchase of a residential house.

This is aimed at increasing home ownership in the country as envisaged in the housing pillar under Big Four Agenda.

The Bill, which was presented to the President for signature by National Assembly Speaker Justin Muturi was passed by Parliament on Wednesday this week.

Present during the brief signing ceremony were National Assembly Majority Leader Aden Duale, National Treasury Cabinet Secretary Ukur Yatani, Solicitor General Ken Ogeto, State House Chief of Staff Nzioka Waita, National Assembly Clerk Michael Sialai and State House Deputy Chief of Staff Njee Muturi.





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