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With effect from 1 January 2019, The Finance Act, 2018 repealed Section 7A of the Income Tax Act, CAP 470 (ITA) on compensating tax and replaced it with a tax on dividends distributed out of untaxed gains or profits.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

Tax Alert Issue No.6 2018

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.

Tax alert Issue No.1 2018 highlights on the changes to various tax laws and regulations effective 1 January 2018. 

Tax Amnesty on Foreign Earned Income – Clarifications

The Finance Act, 2016 introduced an amnesty on all taxes, penalties or interest for the years of income ending on or before 31 December 2016 for taxpayers with foreign earned taxable income through the introduction of Section 37B of the Tax Procedures Act (TPA). This provision refrains the Commissioner of the Kenya Revenue Authority (KRA) from following-up or enquiring on the sources of such income declared under the amnesty. The Finance Act, 2017 amended the deadline for submission of the amnesty returns from 31 December 2017 to 30 June 2018 and introduced requirements for voluntarily declared funds to be repatriated to Kenya. 

On 10 July 2017, KRA published the Guidelines on Amnesty in Respect of Foreign Assets and Income (Guidelines) to offer clarity on the administration of the tax
amnesty. The guidelines required that the tax amnesty is applied through the completion of a Tax Amnesty Return as set out on the iTax platform as Form A/37B (Amnesty Return).

The Finance Act 2016 introduced an amnesty on all taxes, penalties and interest for the years of income ending on or before 31 December 2016 for taxpayers with foreign earned taxable income. Additionally, this new provision restrains the Commissioner General of the Kenya Revenue Authority (read Kenya Revenue Authority) from following-up or enquiring on the sources of such income.

The global tax landscape is a fluid entity - in an ever changing and increasingly complex environment which has seen the arrival of significant tax-related reforms.

The Financier Worldwide features opinions of leading professionals around the world on the latest trends in global tax. Our Tax Partner Michael Mburugu discusses the trends in the Kenya tax landscape (see page 68).