Saturday, September 23, 2023

Swimming pool tax to milk and eggs tax: See list of new proposed taxes

Kenyans are set to be slapped with a new set of taxes. The new proposed taxes that have been issued by the National Treasury under cabinet secretary Njuguna Ndung’u come barely months after the enactment of the punitive taxes and levies under the Finance Act 2023 that is currently being challenged in court.

According to the proposed taxes, schools that swimming pools will start to oay a special tax. At the same time, dairy farmers who deliver their milk to Co-operatives will also start to pay a tax based on their produce.

There will be a five per cent tax to be oaid by farmers who supply milk, eggs and other produce to cooperatives. This tax will be paid on value of produce. Landlords will also start paying rental income tax at corporate tax rate.

A breakdown on the proposals from the National Treasury shows that the new tax measures range from carbon tax on petrol and diesel vehicles.

They also include a new tax on all motor vehicles, higher excise duty on alcohol, cigarettes and sodas as well as VAT on certain services offered by schools such as swimming.

The National Treasury is also planning to stop the zero-rating of value-added tax (VAT) on the supply of tens of goods such as maize flour, cooking gas, ordinary bread, medicaments, agricultural pest control products, and animal feeds.

At the same time, the National Treasury is contemplating raising VAT from the current 16 per cent to 18 per cent.

“Currently, VAT rate in Kenya is among the lowest within the EAC member states. The EAC Common Market Protocol foresees harmonisation of taxes before the EAC Monetary Union,” the National Treasury in the Medium Term Revenue Strategy that aims to enhance domestic revenue collection.

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“In this respect, the government will review the VAT rate as well as VAT exemptions and zero rating.”

The Treasury is also planning a motor vehicle circulation tax as a form of wealth tax. This will be an annual tax paid by motorist when they are acquiring an insurance cover.

“There will be a minimum tax amount payable by all motor vehicle owners in addition to a graduated amount based on the engine capacity of the vehicle,” the National Treasury stated.

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