Treasury Invites Comments for the Finalisation of the Draft Income Tax Bill 2018
The National Treasury has invited institutions, organisations, and individuals to submit their comments for the finalisation and submission of the Draft Income Tax Bill.
The Draft Income Tax Bill 2018 seeks to “review and update the law relating to income tax; to provide for the charge, ascertainment, and collection of income tax; and for connected purposes.”
As mentioned in the Draft Bill, “a tax to be known as income tax shall be charged for each year of income upon all the income of a person, whether resident or non-resident, which accrued in or was derived from Kenya.”
Income tax is charged on dividends, pension, natural resource income, and profits from property, business, and employment. For instance, the Bill proposes to increase tax charged on foreigners receiving pensions from Kenya from five percent to ten percent.
According to the Treasury, the review of the Income Tax Act (Cap 470) aims to make it “productive, simple to comply with, supportive to the Big Four agenda and the growth of the economy as well as embracing international best practice aligned with changes in the present business environment.”
Earlier, the Treasury invited institutions, organisations, and individuals to submit their contributions to facilitate the review of the Act.
“The contributions received from stakeholders have been taken into account,” the Treasury’s public notice reads in part.
In 2017, the Institute of Certified Public Accountants of Kenya (ICPAK) called for the formulation of an income tax policy to guide the review of the Income Tax Act. The Institute believed income taxation from various sectors should be consolidated under one legal instrument. In addition, ICPAK said the review of the Act should result in a more responsive tax income regime.
Nikhil Hira tax expert said: “The current Income Tax Act came into force in 1973. Each year amendments are made in the budgets and subsequent Finance Acts but we haven’t consolidated all these and there are many contradictory provisions now. Many, including KRA, have attempted to consolidate but this has invariably led to a confusing Act. So a rewrite should help to consolidate all the changes and give more clarity.”
Interested parties wishing to submit comments to help with the finalisation and submission of the Bill should do so by 24 May 2018. Submissions should be emailed to Dr Kamau Thugge, Principal Secretary the National Treasury via ITReview2017@treasury.go.ke.