New tax reliefs to be active until August 2020

The new tax reliefs announced by President Uhuru Kenyatta on Income Tax and Value Added Tax will be in place until August this year – with the period deemed atleast sufficient to assess the economic impact of the Covid-19 pandemic even as the infection numbers continue to rise rapidly.

As of Thursday the pandemic had claimed 3 lives since the first case was reported in March 13.

The Kenya Revenue Authority (KRA) in a statement to the public effected the new tax regulation as follows;

VAT ACT, 2013

Reduction of VAT from 16% to 14% with effect from 1st April, 2020. The change shall affect the VAT returns to be submitted after April, 2020.

INCOME TAX ACT, CAP 470

Business Laws (Amendment) Act, 2020 amended the Income Tax Act to provide for investment deduction equal to one hundred and fifty percent of the capital expenditure of at least five billion shillings incurred on the construction of bulk storage and handling facilities for supporting the Standard Gauge Railway operations of a minimum storage of one hundred thousand metric tonnes of supplies.

EXCISE DUTY ACT, 2015

The Business Laws (Amendment) Act, 2020, amended the 1st schedule of the Excise Duty Act, 2015 by imposing excise duty on imported glass bottles (excluding imported glass bottles for packaging of pharmaceutical products) at a rate of 25%.