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Legal Notices on Exemptions

LN-No: 51,  53,  54,  82,  37,  48,  91,  165.

Legal Notice No. 51 - Income Tax Act – Exemptions 

L.N 51 8 June 2005
IN EXERCISE of the powers conferred by section 13(2) of the Income Tax Act, the Minister for Finance directs that the interest earned on asset backed securities issued by a company or a trust under section 33C for the Capital Markets Act shall be exempt from tax.
  • Made on the 8th June 2005
  • DAVID MWIRARIA Minister for Finance
Finance Act 2005 L N 53 8 June 2005 

Legal Notice No. 53 – Prescribed Limit of Medical Benefit 

IN EXERCISE of the powers conferred by section 5(4)(b) of the Income Tax Act, the Minister for Finance prescribes the sum of one million shillings to be the maximum limit for the purposes of that paragraph.
  • This notice shall come into effect on the 1st January 2006
  • Made on the 8th June 2005
  • DAVID MWIRARIA Minister for Finance
Finance Act 2005 L N 54 8 June 2005 

Legal Notice No. 54– Declaration of Crops 

IN EXERCISE of the powers conferred by section 2(1) of the Income Tax Act, the Minister for Finance declares eucalyptus, pine and cypress to be permanent or semi-permanent crops for the purpose of the Act.
  • Made on the 8th June 2005
  • DAVID MWIRARIA Minister for Finance

Finance Act 2010 Legal Notice 82 10 June 2010 

Legal Notice No. 82– Revocation of Exemption 

IN EXERCISE of the powers conferred by Section 13 (2) of the Income Tax Act, the Deputy Prime Minister and Minister for Finance revokes the exemption from income tax of the income of the Retirement Benefits Authority conferred by Legal Notice 169 of 2001.
  • Made on the 10th June 2010 
  • Uhuru Kenyatta - Deputy Prime Minister and Minister for Finance

Legal Notice 37 15 April 2011 
Legal Notice No. 37 – Guidelines on allowability of bad debt 

PURSUANT to section 15 (2) (a) of the Income Tax Act, the Commissioner General issues the guidelines set out in the Schedule hereto on allowability of bad debts for tax purposes.

SCHEDULE 

  • 1. A debt shall be considered to have become bad if it is proved to the satisfaction of the Commissioner to have become uncollectible after all reasonable steps have been taken to collect it.
  • 2. A debt shall be deemed to have become uncollectable under paragraph (1) where 
    • (a) the creditor loses the contractual right that comprises the debt through a court order; 
    • (b) no form of security or collateral is realizable whether partially or in full; 
    • (c) the securities or collateral have been realized but the proceeds fail to cover the entire debt; 
    • (d) the debtor is adjudged insolvent or bankrupt by a court of law; 
    • (e) the costs of recovering the debt exceeds the debt itself; or 
    • (f) efforts to collect the debt are abandoned for another reasonable cause. 
  • 3. A bad debt shall be a deductible expense only if it is wholly and exclusively incurred in the normal course of business. 
  • 4. For the purposes of these guidelines, a bad debt which is of a capital nature shall not be an allowable expense. 
M. G. WAWERU , Commissioner-General, Kenya Revenue Authority.

Legal Notice 83 of 2010 (revoked) Legal Notice 48 08 June 2011

Legal Notice No. 48 – Exemption: Funds Contributed by members of the Association of Kenya Insurers

  • 1. IN EXERCISE of the powers conferred by Section 13 (2) of the Income Tax Act, the Deputy Prime Minister and Minister for Finance directs that the funds contributed directly by the members of the Association of Kenya Insurers, in respect of the Integrated Motor Insurance Data Base System (IMIDS) project, shall be exempt from income tax: 
Provided that -
    • (a) this notice shall apply to - 
      • (i) the amount of Kenya shillings one million, one hundred and seventeen thousand, six hundred and forty-seven contributed by each member; and 
      • (ii) the income to be exempted shall not exceed the cost of the project; 
    • (b) the income to be exempted shall not exceed the cost of the project. 
  • 2. This notice shall apply with effect from the 1st March, 2010 to the 29th February, 2012. 
  • 3. Legal Notice No. 83 of 2010 is revoked. 
Made on the 8th June, 2011.
Uhuru Kenyatta , Deputy Prime Minister and Minister for Finance

Legal Notice No. 91 22nd May, 2015 

Legal Notice No. 91 Exemption 

IN EXERCISE of the powers conferred by section 13 (2) of the Income Tax Act, the Cabinet Secretary for the National Treasury directs that the interests to be paid on loan from foreign sources for investing in the energy or water sectors, or in roads, ports, railways or aerodromes shall be exempt from tax.
  • Made on the 22nd May, 2015.
  • HENRY ROTICH, Cabinet Secretary for the National Treasury.

Legal Notice No. 165 19th August, 2015 

Legal Notice No. 165 Exemption 

IN EXERCISE of the powers conferred by section 13 (2) of the Income Tax Act, in order to attract more investments in the energy sector for the purpose of lowering the cost of energy, as may be provided for under any Power Purchase Agreement, the Cabinet Secretary for the National Treasury directs that the payment that shall be made to a non-resident for services rendered under a Power Purchase Agreement shall be exempt from tax.
  • Made on the 17th August, 2015.
  • HENRY ROTICH, Cabinet Secretary for the National Treasury.