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Finance Act 2023 Kenya

SUMMARIZED - FINANCE ACT, 2023

Assented on 26th June, 2023

  1. (Finance Act 2023 wef 1st-September-2023 ) for sections 10, 26(b)(xiii), 52, 56, 63, 64 and 74;                                 (Finance Act 2023 wef 1st-January-2024 ) for sections 5(c), 6, 12, 14, 20, 25, 26(a), 26(b)(iii), 26(b)(v), 26(b)(vii), 26(b)(ix), 26(b)(x), 26(b)(xii), and 27;                                                                                            (Finance Act 2023 wef 1st-July-2023 ) for all other sections,
  2. Winnings redefined, digital content monetisation, immovable property, related person definitions added in Sec2-ITA.
  3. Definition in Sec3-3-c-i-ITA deleted and transferred to Sec2-ITA
  4. Foreign exchange loss deferred to max of 5years for Thin Cap & accumulated losses removed- Sec4A-ITA
  5. Travelling allowance, subscription fees, options, company shares offer, etc Sec5-ITA
  6. Repatriated income for non-resident to be taxed. Sec7B-ITA
  7. After Audit adjustment WHT paid to Non-resident shall not be refundable. Sec10-ITA
  8. Subsection (3A) deleted Sec11-ITA
  9. TOT threashhold reduced from 50M to 25M. Sec12C-ITA
  10. Digital asset tax introduced in Sec12C-ITA
  11.  *Missing*, wife’s employment income in now not a separate source of income. Sec15-ITA
  12. Non eTIMS invoices,  club fees,  interest paid to a non-resident ,now not allowable Sec16-ITA
  13. Expenditure incurred outside Kenya by a non-resident person, his executive and general administrative expenses, 150K remuneration for directors now allowable. Sec18-ITA
  14. Qualifying intellectual property income subject to the preferential tax rate formula Sec18-ITA.
  15. Sec18D Amended: Filing of CBCR, master file and local file. Sec18-ITA.
  16. Sec18F Amended: Definitions Sec18-ITA.
  17. Amendments in Sec21-ITA
  18. SOFA Amendments in Sec28-ITA
  19. Deleting "his" and replacing with "Individual" Sec31-ITA
  20. Introduction of Post-retirement medical fund relief Sec31-ITA
  21. Digital content, sales promotion, payment in five working days Sec35-ITA. 
  22. Wife’s income provisions repealed Sec45-ITA. 
  23. Second Schedule the provisions of paragraph 24E extended till Dec2024 in Sec133-ITA. 
  24. Proviso added to Par10, manufacture of human vaccines revamped, 1stSch-ITA
  25. Industrial Building and Docks added to ID at 10%, etc 2ndSch-ITA
  26. New Relief, individual rates increased, NR tax reduced, etc 3rdSch-ITA
  27. Mortgage refinance companies added as financial institution under 4thSch-ITA
  28. Various amendments on property under 8thSch-ITA
  29. Amendment of the Ninth Schedule to Cap. 470.  9thSch-ITA
  30. VAT of fuel and LPG deleted. Sec5-VATA 
  31. Sec8-VATA amended in ss2
  32. Sec12-VATA amended in ss1
  33. Compensation for earlier deduction shall be treated as taxable supply Sec12-VATA 
  34. Bad debts provisions amended Sec31-VATA 
  35. VAT registration a must for imported digital services over the internet Sec34-VATA 
  36. You can now keep records outside Kenya Sec43-VATA 
  37. The First Schedule to the VATA, 2013, various amendments.
  38. The Second Schedule to the VATA, 2013, various amendments.
  39. Section 13 of the TAT Act, 2013, is amended.
  40. Sec 2 EDA amended.
  41. Sec 10 EDA (Adjustment for inflation ) Repealed.
  42. Sec 20 EDA amended.
  43. Sec 28 EDA (Excise stamps ) amended.
  44. Sec 36 EDA amended by adding ss 1A.
  45. Sec 36 EDA amended by adding sec 36A.
  46. Sec 40 EDA (Adjustment for inflation ) Repealed.
  47. First Schedule ****Part I later, part II done, 
  48. Second Schedule  EDA  is amended by adding Par17.
  49. Tax decision redefined in Sec3 TPA
  50. Sec 6A TPA amended
  51. Trustee required to maintain records Sec 23 TPA
  52. Electronic tax invoices provisions in Sec 23 TPA
  53. Amendments of assessments under Sec 31 TPA
  54. New subsection 32A-Mutual administrative assistance in the recovery or collection tax claims added in Sec 32 TPA
  55. Sec 37 TPA repealed
  56. Amnesty introduced in Sec 37E TPA
  57. Amendments in Sec 42 TPA
  58. Amendments in Sec 42A TPA
  59. Appointment of rental income tax agent introduced in Sec 42C TPA
  60. Amendments in Sec 47 TPA
  61. Amendments in Sec 51 TPA
  62. Amendments 90 to 120 days in Sec 55 TPA
  63. Data management and reporting system introduced in Sec 59 TPA
  64. Penalty for failing to comply with electronic tax system amended under Sec 86 TPA
  65. Waiver on Penalty or interest removed under Sec 89 TPA
  66. Offence of impersonating an authorized officer added in Sec 97 TPA
  67. Correction made in Sec 104 TPA
  68. lmport declaration fee amended in Sec 7 MFLA.
  69. Imposition of export levy amended in Sec 5 MFLA.
  70. Export and investment promotion levy introduced in Sec 7A MFLA..
  71. Railway development levy amended in Sec 8 MFLA.
  72. Stop pg47 pending