The budget for 2016-2017 in Kenya, presented 9 June 2016, reflects what are described as “nominal” tax increases despite an aggressive increase in revenue targets. Accordingly, it is anticipated that tax administration and a focus on revenue collection will be enhanced.
Yet, the budget also offers certain tax incentives. For example, to address a housing deficit, the budget proposes to lower the rate of corporate tax for developers that construct at least 1,000 “decent low costs” housing units per year to 20% (from the current 30% rate). The budget also introduces a simplified tax regime for residential rental income (with tax imposed at a flat 10% rate).
The budget includes proposals for a tax amnesty program, allowing taxpayers with assets and businesses outside of Kenya to repatriate these assets and income to Kenya with amnesty provided for the related taxes, interest, and penalties.
Concerning value added tax (VAT), the budget would allow new exemptions from VAT for certain garments and footwear and, to assist farmers, for certain animal feeds.
Read a June 2016 report [PDF 5.61 MB] prepared by the KPMG member firm in Kenya: Budget Brief
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