The Tax Law Amendment Bill comes with a wide array of tax reliefs that will see many companies and individuals benefit.
Nevertheless, this amendment bill comes with other measures that are meant to increase the revenue generating channels and help the government sustain its operations. It is understandable that the government has frozen some of its operations in order to channel the
funds into the fight against the emergence of the Covid-19 in the country. However, some of the proposals will see that the people experience tougher times ahead.
Income Tax Act
Turnover Tax at 1%
The Bill proposes to reduce the Turnover tax rate from 3% to 1%. The Bill further proposes to extend the qualifying threshold for persons with annual turnover between Kshs 500,000 to Kshs 50 Million from the current limit of Kshs 5 Million. The Bill also proposes to eliminate presumptive tax applicable to small and medium enterprises.
This is a welcome move since it shows how concerned the government is in protecting the business operators in micro, small and medium enterprises. This will encourage entrepreneurs and small scale investors to establish new companies for their business operations.