Kenya: Proposal for minimum tax included in Finance Bill, 2020

Kenya: Proposal for minimum tax, in Finance Bill, 2020

The Finance Bill, 2020 (published in the official gazette on 5 May 2020) proposes multiple changes to the tax laws. The bill follows presidential assent to the Tax Laws (Amendment) Act, 2020—the legislation that was intended to provide relief and economic support in response to the coronavirus (COVID-19) pandemic.


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Certain provisions that were proposed in the Tax Laws (Amendments) Bill, 2020 were rejected by the National Assembly on the basis that the measures would have imposed an additional burden on taxpayers rather than providing relief.

The Finance Bill, 2020 proposes to reintroduce some of the measures rejected by the National Assembly, including proposals for taxing pensions paid to persons above 65 years of age, bonuses, and overtime paid to “low income employees.”

The National Treasury further 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 would be 1% of gross turnover and would be remitted to the Kenya Revenue Authority on a quarterly basis. 

Read a May 2020 report prepared by the KPMG member firm in Kenya

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