Owing to the upcoming elections, the Cabinet Secretary for National Treasury, Mr Henry Rotich, presented Kenya’s budget of KES 2.6 Trillion on 30 March 2017. As has become the trend year after year, it was the largest ever budget, yet. As is normal with an election budget, the CS introduced minimal tax increases despite the government’s ambitious revenue target of over KES 1.7 Trillion for the 2017/18 fiscal year. However, the government plans to borrow more than KES 800 Billion.
Some of Wanjiku’s cries seem to have finally reached the government’s ears as she scored some significant victories with the expansion of Pay As You Earn (PAYE) tax bands and personal relief, enhancement of social safety net programme and zero rating of bread and maize. Similarly, some investors such as new motor vehicle assemblers will be smiling on account of the tax breaks. The biggest losers, however, appear to be the betting, gaming and lottery individuals and companies as the applicable taxes have now been harmonised at a uniform rate of 50%.
While we await for the Finance Bill, 2017 for clarity and confirmation of the effective dates for the proposed changes, KPMG has reviewed the budget speech and we provide below a summary of the budget proposals and other tax measures.
Please get in touch with us for discussions on how the budget measures will affect your business.
© 2017 KPMG Advisory Services Limited, a Kenyan Limited Liability Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.