KENYA BUDGET 2013-2014 TAX MEASURES AND MISCELLANEOUS AMENDMENTS Overview of the Proposed Tax Measures Facilitating Infrastructure Development for a Competitive Economy 1. exempt import duty on importations of items used to facilitate railway operations in order to support the expansion and development of the railway network in the region. 2. amendment to the Customs and Excise Act to introduce a Railway Development Levy of 1.5 percent on all imported goods, to mobilize additional Ksh 15 billion to fund construction of a standard gauge railway line from Mombasa to Kisumu 3. exemption of plastic bag bio-gas digesters. Encouraging growth of Industries for Faster Growth and Employment - increase import duty 1. on welding electrodes from 10% to 25% 2. millstones and grindstones from 0% to 25% 3. plastic tubes for packing of toothpaste, cosmetics and similar products from 10% to 25%. Further Ensuring Equity and Fairness in our Tax System 1. exempt premiums for Group Life and Group Personal Accident policy covers where they do not confer a benefit to the employees. 2. extend the tax exemption status period to five years for Persons with Disabilities 3. amend the Income Tax Act so as to impose withholding tax on winnings from gaming and betting. 4. review of the Capital gains tax under the Income Tax Act with a view to formulating modalities for its effective enforcement. Deepening Tax Reforms and Enhancing Tax Administration 1. legislative amendments in the revenue statutes in order to align them with the Constitution (Excise, VAT and Income Tax laws) 2. place an enabling tax, legal and regulatory framework to streamline the entire Income Tax Exemption management process in line with the Constitution. 3. amend law to allow KRA to compound tax offences under the Income Tax Act. 4. amend the Income Tax Act so as to empower the Commissioner to access books of accounts and where tax evasion is proved in Court, and collect corporate tax from officers of corporate bodies where they are convicted of tax frauds. 5. amend the customs law to introduce Customs warehouse rent for entered goods which remain at the port of discharge for a period exceeding 21 days from the date of commencement of discharge of the carrier. 6. issued a new gazette notice “Excisable goods Management system 2013”, which prescribes procedures and guidelines for its operations. 7. 50 percent excise tax remission in respect of beer made of millet, sorghum and cassava; Senator keg beer to enjoy 50 percent excise tax remission for three years. This measure will generate an additional Ksh 6.2 billion to the exchequer. 8. table before the Parliament a Tax Appeals Tribunal Bill that will establish a single tax appeals body. This measure will improve the dispute resolution framework, instill professionalism and fast track conclusion of tax cases in compliance with the Constitution. 9. re-table VAT Bill, which aims to simplify, modernize and reduce cost of compliance. The enactment of this bill will raise at least an additional Ksh 10 billion to the exchequer. 10. developing a new excise bill. 11. ensure all landlords earning rental incomes pay their due share of taxes to the exchequer. Further Strengthening Financial Systems for Sustainable Development 1. amend the Insurance Act to open up the ownership of insurance companies and brokerage firms to other citizens of the EAC Community. 2. amend the law to remove restriction of foreign ownership for insurance agents. 3. amend the law to require the Insurance Regulatory Authority, while intervening in the management of an insurer to appoint a competent person familiar with the business of the insurer. 4. expand the mandate of the Policyholders Compensation Fund to include participation in the liquidation process of insurance companies. 5. Insurance Regulatory Authority to initiate an overhaul of the Insurance Act to align it with best international practices and our Constitution - drafts ready by end of September 2013. The review should target having two legislations, one for the establishment of the Authority and the other covering regulatory issues of the market. The Retirement Benefits Authority to carry out a similar exercise and have drafts ready by end December 2013. 6. Amendments to the Kenya Deposit Insurance Act to expand the Corporation’s mandate and enhance its corporate governance. 7. amend the law to encourage pooling of resources through real estate investment trusts for the sole purpose of real estate development. 8. amend the law to provide a conducive environment for a dynamic capital markets that will facilitate introduction of new capital markets products and services on an accelerated basis. 9. amend the Capital Markets Act to provide for the issuance of regional fixed income securities. 10. amend the Capital Markets Act to redefine the offence of insider trading as an offence of strict liability and further propose to specifically identify a range of the most common market manipulation offences to guide the courts and the investing public on the nature of these offences. 11. amend the Banking Act to enhance the penalties provided for such offences. 12. amend the Microfinance Act to foster prompt corrective action where problems in institutions are identified early and dealt with in a timely and progressive manner.
Posted on: Thu, 13 Jun 2013 14:25:57 +0000
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