Companies and individuals in Kenya will start paying new taxes at the start of a financial year every July 1 if lawmakers adopt a proposed law that seeks an earlier approval of the Finance Bill to cure delays in collection of duty that has in the past hurt revenue collection targets.
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The National Assembly shall consider and pass the Finance Bill, with or without amendments, in time for it to be assented to by 30th June each year,” reads the Bill, which seeks to amend Section 39 of PFM Act to correct this anomaly.
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The Business Laws (Amendment) Bill, 2019 requires that Kenya’s Treasury table the Finance Bill in Parliament before April 30 and have it approved by the President as law by June 30. This is a departure from the current trend where the Finance Bill is tabled in Parliament after the third week of June and takes months before it becomes law.
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The government-backed Bill was tabled in Parliament by Leader of Majority in the National Assembly Aden Duale.
The resulting delays have deferred collection of new taxes, which have made it difficult for the Kenya Revenue Authority (KRA) to meet its revenue collection targets, prompting frequent review of to the national Budget to accommodate the lower revenue collection.President Uhuru Kenyatta signed the Finance Bill for the current financial year on November 7, meaning that by then, KRA had lost four months of collecting new taxes outlined in the Budget.
The period between the tabling of the Finance Bill — which spells out the new taxes to fund annual State operations — in Parliament and the proposal becoming law is usually punctuated by back and forth discussions among MPs, the Treasury and State House.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer.
He could be contacted at udohrapulu@gmail.com