Parliamentary Finance Committee gives some reprieve on proposed Tax Measures

The parliamentary committee after hearing submissions from various stakeholders including manufacturers, economists, and social media during the public participation stage of the Finance Bill 2022 agreed with the rationale presented by those stakeholders

Some of the key things they agreed on was; 

• The Committee recommended that the amendment to remove from the zero rated list of maize flour, cassava and wheat among others be deleted to cushion Kenyans from further increased cost of living.
• On the proposal to increase Digital Service Tax from 1.5% to 3% of the gross transactional value, the committee recommended Digital Service Tax be retained at 1.5%
• On the proposal to increase Capital Gains Tax from 5% to 15% of the gains, the Committee noted that the increase was a big leap and recommended the tax be revised to 10%. 
• On the proposal on 10% to 25% excise duty increase in alcoholic beverages and glass bottles, the Committee recommended deletion of the amendment proposing increase of excise duty on alcoholic beverages so as not to encourage consumption of illicit alcohol. Increasing excise on glass bottles will give international glass manufacturers undue advantage over local glass manufacturers. 
• On the proposal for a 15% excise duty on fees charged on advertisements of alcoholic, gambling and gaming activities on various media, the Committee recommended deletion of the amendment noting there are regulations in place regulating advertising.  
• On the proposal to increase of gambling taxes; gaming, betting, lotteries and price completion from 7.5% to 20% of amount wagered, the Committee observed that the gambling taxes were increased in Finance Act 2021 and noted that there is need to give the sector time before increasing taxes. Committee recommended deletion of the amendment. 
• On the proposal to introduce a requirement of 50% deposit of disputed tax revenue with Central Bank of Kenya before appealing a tribunal’s decision, the Committee recommended the clause be deleted as it will hinder justice and reduce business working capital.