PKF in Eastern Africa
The Finance Act, 2020 was assented into law by the President on 30 June 2020 with a majority of the proposals in the Finance Bill, 2020 being enacted. Our tax alert analyses the Finance Act, 2020 and clarifies the effective dates for each of the amendments.
Withholding Value Added (VAT) Tax Refunds Withholding VAT was reintroduced through the Finance Act, 2014 and over the years its scope has been significantly widened through the appointment of various agents who have been required to withhold VAT when settling supplier debts. Until the changes implemented under the Finance Act 2019,
6% out of the 16% (now 14%) VAT was required to be withheld by such agents (which dropped to 2% under the Finance Act, 2019). A number of taxpayers ended up with growing VAT credits as a result of such withholding VAT, particularly those taxpayers whose supplies were a combination of zero-rated and standard rated products. The VAT legislation however made no provisions for the refund of the credits related to such withheld VAT.
The Finance Bill, 2020 (Bill) was published for introduction to the National Assembly on 5 May 2020 detailing out various tax and fiscal proposals. The Bill is open for public participation and PKF will be making detailed submissions in relation to the same. It is important to note that the proposals contained in the Bill are not effective until approved by parliament and enacted into law in the form of an Act. The effective date for each proposal will be specified in the Act.
The Tax Laws (Amendment) Act, 2020 (Act) was assented by the President on 25 April 2020 and published on 27 April 2020. Most of the provisions in this Act became effective on the date of assent save for the amendments to Section 5(2) of the Value Added Tax (VAT) Act, 2013 which becomes effective on 15 May 2020. This Tax Alert supersedes our Tax Alert Issue number 2 of 2020 which analysed the provisions of the Bill which has now become law.
On 25 March 2020, President Uhuru Kenyatta announced various measures ‘to cushion every Kenyan from the shocks arising from COVID-19’, with the principle aim of providing certainty to both employees and employers. Subsequently, The Tax Laws (Amendment) Bill, 2020 was Gazetted on 30 March 2020 detailing out these and various other fiscal proposals. This is in addition to the reduction of the Value Added Tax (VAT) rate to 14% which was effected on 1 April 2020.
President Uhuru Kenyatta rolled out various measures ‘to cushion every Kenyan from the shocks arising from COVID-19’, with the principle aim of providing certainty to both employees and employers. We have summarised the proposed measures from the President’s statement in this alert. We however expect more details about these measures, including effective dates to be included in a Bill and subsequently an Act of Parliament or through Gazette notices. We will issue a more detailed alert when this information is available.
Attached are the tax proposals in the Financial Act 2019 with the earliest having an effective date of 7 November 2019 and the rest becoming effective from 1 January 2020.
The new Tax Procedures Law officially known as the Law No. 026/2019 of 18/09/2019 on Tax Procedures was published in the official gazette on 10 October 2019 and came into force on the same day. This new law repeals the previous Law No. 25/2005 of 04/12/2005 on Tax Procedures which had been in force since 2005.
Several amendments have been made and in this newsletter, we have highlighted some of the changes that we opine may have a fundamental impact on the way you do business in Rwanda in terms of tax procedures.
There have been several changes in tax legislation and how the Kenya Revenue Authority (KRA) is handling certain tax matters over the past couple of months. This tax alert gives an overview of these tax changes and developments.
This journal is an extension to our Feb 19 journal which had put the EFD under spotlight. In this journal we aim to address common questions a taxpayer faces during the process of issuing a tax invoice, claiming the same and mechanics for processing credit notes.
This Tax Alert highlights the facts of the recent High Court ruling on the Double Taxation Agreement between Kenya and Mauritius and the recent developments with respect to Value Added Tax (“VAT”).
Tanzania has implemented an electronic fiscal device (EFD) system since 2010. Over the years we have come across taxpayers who have been penalized for improper or negligent use of their EFD.
Through this journal we shed some light on how to manage EFD effectively and we also guide you on how to check compliance boxes to avoid tax repercussions.
Dividend Distribution Tax
With effect from 1 January 2019, The Finance Act, 2018 repealed Section 7A of the Income Tax Act, CAP 470 (ITA) on compensating tax and replaced it with a tax on dividends distributed out of untaxed gains or profits.
The Kenya Revenue Authority (“KRA”) has issued certain clarifications on the operation of the new changes which we highlight in the publication.
The Finance Act, No. 10 of 2018 (The Act) which was assented on 21 September 2018 amended various tax laws as highlighted in our 2018 Budget Book and Tax Alert Issue No. 5 2018.
Whereas most of the amendments became effective on 1 July 2018, there are a number of amendments which became effective on 1 January 2019. This alert highlights amendments which became effective on 1 January 2019 and the recent developments with respect to Value Added Tax Auto Assessment (“VAA”) among other important developments.
Download the PKF Tax Alert Issue No. 1 of 2019 which elaborates the Amendments that were effective 1 January 2019
The Kenya Revenue Authority (KRA) recently introduced the VAT Auto Assessment (VAA) process, which is a system-based solution that aims at identifying unsupported and fictitious input VAT claims, thereby broadening the tax base and increase revenue collections
Tax alert Issue No.5 2018 highlights on The Finance Act, 2018 (Finance Act) that was assented by the President on 21 September 2018 following protracted disapproval by majority of members of the National Assembly. Whereas, the Act faced ‘majority opposition’, the members could not garner the required constitutional threshold to over-turn the President’s memorandum. Some sections of the Finance Act have been received with mixed reactions in many quarters. The proposed changes are likely to lead to an increase in pricing of basic commodities such as cost of transportation, food and electricity.
Tax alert Issue No.4 2018 highlights on the Tax Laws (Amendment) Act, 2018 (The Act) that was assented on 18 July 2018 has amended various provisions of the Income Tax Act (Cap. 470), Stamp Duty Act (Cap. 480) and the Value Added Tax Act, 2013 (No. 35 of 2013).
Rwanda tax alert highlights on the new income tax law published on 16 April 2018
Tax alert Issue No.3 2018 highlights on an overhaul of income tax regime in Kenya - Income Tax Bill, 2018
Tax alert Issue No.2 2018 highlights on the Tax Laws (Amendment) Bill.