The Finance Bill 2020 (The Bill), which was gazetted on 5 May 2020 proposes a raft of changes to the tax laws barely a week after the President assented to the Tax Laws (Amendment) Act, 2020, whose primary objective was to cushion the public against the economic and social ravages of COVID19.
A number of the proposals in the Tax Laws (Amendments) Bill, 2020 were rejected by the National Assembly on the basis that they imposed additional burden on taxpayers rather than providing the much needed relief. Interestingly, the Finance Bill, 2020 proposes to reintroduce some of the changes that the National Assembly rejected including taxing pensions paid to persons aged above 65 years and bonuses and overtime paid to low income employees.
Further, through the bill, the National Treasury intends to introduce a new tax known as minimum tax, prescribing a minimum tax to be paid by all taxpayers. The proposed minimum tax rate is one percent of gross turnover and is to be remitted to the Kenya Revenue Authority (KRA) on a quarterly basis.
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