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No new taxes have been introduced in Kenya Finance Bill, 2021-PwC

“The Finance Bill is expected to be debated in Parliament and enacted into law in the month of June,” commented Titus Mukora, Africa Transfer Pricing Leader at PwC Africa. “We hope the Parliament in conjunction with the Government will ensure the amendments proposed in the Bill carry through other sections of the respective tax laws to avoid ambiguity in law which normally result in tax disputes,” concluded Mukora.

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PwC logo.PHOTO/Courtesy.

The Finance Bill, 2021 (the Bill) published on 30 April 2021 proposes to amend several tax laws and other non-tax laws.

In this year’s Bill, no new taxes have been introduced in contrast to the previous year’s Bill, where a raft of new taxes including turnover taxes, minimum tax and the digital services tax were legislated into existence.

While no new income taxes have been introduced, the Bill has proposed to amend the definition of the term “control” and permanent establishment.

The new definitions of both terms are quite broad and would have significant implications from an international tax and transfer pricing perspective.

There is a proposal to amend the applicability of the digital service tax (“DST”) to non-residents only.

This is a commendable move by the Government as it reduces the additional burden of DST compliance by resident persons who are already subject to corporate income tax.

While the Government has removed DST obligation from resident persons, they have amended the scope of DST to include income accruing from an ‘online business’ or an electronic network in addition to income accruing through a digital marketplace.

This amendment appears to seek to widen the tax base to include other online businesses that would not constitute a digital marketplace.

However, it is unclear whether this objective has been achieved as other critical sections of the Income Tax Act have not been amended to allow for the expansion of DST.

From an indirect tax perspective, a new excise tax has been proposed in respect of the Betting industry.

This continues the trend of levying taxes on the Betting industry which is now one of the most highly taxed sectors.

Similar to previous years, the trend of reducing the scope of goods and services that are zero rated and VAT exempt continues in this Bill.

Further, this year has also seen some focus around tax procedures which are primarily geared towards increasing the scope of authority of the KRA and providing more powers to the Commissioner.

These amendments under the Tax Procedures Act appear to be overly biased towards the KRA without taking into account the taxpayer’s perspective and in some instances these provisions may be in conflict with other sections of the Tax Procedures Act and procedural rules contained in other statutes.

Finally, one of the glaring oversights noted in most of the proposed amendments in the Bill is the failure to carry through the amendments to other sections of the respective tax laws which may result in gaps and lack of clarity in law.

These gaps lead to confusion and misinterpretation of the tax laws by taxpayers.

“The Finance Bill is expected to be debated in Parliament and enacted into law in the month of June,” commented Titus Mukora, Africa Transfer Pricing Leader at PwC Africa. “We hope the Parliament in conjunction with the Government will ensure the amendments proposed in the Bill carry through other sections of the respective tax laws to avoid ambiguity in law which normally result in tax disputes,” concluded Mukora.

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Atheists fault petition seeking to deregister society

Atheists in Kenya have protested a petition that they say seeks to create a notion that Kenya is a nation by and for believers in God only.

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President of the Atheists in Kenya Society, Harrison Mumia

Atheists in Kenya have protested a petition that they say seeks to create a notion that Kenya is a nation by and for believers in God only.

Former Juja MP, Dr Stephen Ndichu has moved to court seeking to have the Atheists in Kenya Society suspended on grounds that its continued existence is unconstitutional.

In a statement, the society’s president, Harrison Mumia says the petition is an assault on religious freedom and an insult to the diversity of the Kenyan people.

“We find the petition repugnant to a good conscience,” he stated adding that Dr Ndichu is a Christian fundamentalist who seems to harbour paranoid fantasies about the dangers of atheists existing in Kenya.

He further accused Dr Ndichu of seeing enemies where there is none and that the society was surprised, but not shocked as religion has historically inhibited progress.

He vowed that the society would do everything within its power to defend its right to remain a registered society and urged Kenyans to support fighting the petition.

On Sunday, the society said it will be writing to President William Ruto seeking an invitation to State House, just like the evangelical denominations.

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Uhuru Gardens ready for Madaraka Day fete, says PS Kibicho

The principal secretary said they would be visiting the gardens every Thursday until June 1 to ensure all loose ends are tied up properly, promising that the celebrations will be very colourful.

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Madaraka Day

This year’s national Madaraka Day celebrations at Uhuru Gardens in Nairobi County will be open to 30,000 people, up from 10,000 in 2021.

Permanent Secretary in the State Department for Interior, Dr Karanja Kibicho, said this follows the relaxation of COVID-19 containment measures.

“Children will also be allowed in on the celebrations this year, and we expect county celebrations to happen too,” the PS said while on an inspection tour of the venue.

The PS said the government decided to move the celebrations from the County rotational back to Nairobi because it will be the last event for the current administration before it exits office.

“Because of the significance of this particular Madaraka day, being the last for this regime, we decided to celebrate it at Uhuru Gardens to break the tradition of celebrating it in counties,”

He revealed that preparations were currently at 90 percent complete and expressed confidence that all will be set for the event as the country marks 59 years of self rule.

The principal secretary said they would be visiting the gardens every Thursday until June 1 to ensure all loose ends are tied up properly, promising that the celebrations will be very colourful.

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Queen Elizabeth mourns Kibaki as a great Statesman with commendable legacy

Kibaki will be buried at his home in Othaya, Nyeri County on Saturday.

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Queen Elizabeth II has mourned former President the late Mwai Kibaki eulogizing him as “a great statesman”.

“I was sorry to receive the news of the death of Mwai Kibaki. He had a lifelong record of service to the Kenyan people. It will be of deep sadness to your country to have lost a great statesman, but Kenya can take pride in the legacy of his leadership. I send you and the people of Kenya my condolences at this loss,” the message read.

The British High Commission further affirmed its close ties to Kenya and renewed its assurances to the country’s Ministry of Foreign Affairs.

“The British High Commission avails itself of this opportunity to renew to the Ministry of Foreign Affairs of the Republic of Kenya the assurances of its highest consideration,” the High Commission said.

The late Kibaki passed away on 21 April 2022, aged 90.

President Uhuru, who issued a proclamation that he would be granted a state funeral with full civilian and military honours, announced his death.

Kibaki will be buried at his home in Othaya, Nyeri County on Saturday.

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