The Finance Bill, 2023, contains various highly investor-friendly amendments. Other than focusing on raising or introducing new taxes, there is an aspect of closing loopholes that were used not to pay tax. This is a suitable tax collection model compared to introducing new or raising taxes, as has always been the usual practice.
The new areas that the Finance Bill, 2023, is focusing on to tax or allow deductions include digital content monetization, digital assets, interest in immovable property, repatriated income, loans issued to manufacturing companies by nonresident persons, nonresident person expenditures arising outside Kenya, post-retirement medical relief fund, rental income, exemptions by entities in manufacturing the human vaccine, automotive industry (local content), mandatory VAT registration for certain entities, among others. By design, the proposed amendment may have business with revenue below KES. 5,000,000 being forced to register for VAT for purposes of dealing with certain entities since most allowable deductions will be based on the VAT Act, 2013, complaint receipts.
Once it becomes a law, various provisions of the Bill will become operational on July 01, 2023, September 01, 2023, and others on January 01, 2024.
Click HERE for Ong’anya Ombo Advocates LLP’s summary, which only highlights some of the proposed amendments.