Through the Ministry of Treasury, the tax measures will be consolidated into three new bills which will be tabled in Parliament: the Tax Laws (Amendment) Bill, 2024, the Tax Procedures Bill ( Amendment), 2024 and the Public Finance Management (Amendment) Bill, 2024.

Unlike in the past when the government tabled bills without much fanfare, this time the Treasury published a two-page explanation in local dailies to provide a detailed account of the new proposals.

The move now risks sparking more public unrest, as new taxes would increase pressure on a population already struggling with the high cost of living.

Treasury CS John Mbadi said the new bills would boost economic growth and help fill the budget deficit thanks to better revenue collection.

Following the withdrawal of the 2024 finance bill, the government estimated a deficit of Ksh 346 billion.

Here are some of the tax measures that are making a comeback.

Expand the digital market

Much like the Finance Bill, the Taxation (Amendment) Bill, 2024 will seek to amend section 3 of the Income Tax Act to include more digital operators in the income tax bracket. taxation.

This will now include food delivery services, professional services, freelance services, rental services and ride sharing services.

“This proposal aims to broaden the tax base by integrating into the tax net the income of the owners of digital platforms that offer the above services,” the bill reads in part.

The Taxation (Amendment) Bill, 2024 also seeks to introduce a minimum additional tax. This is a new measure that will ensure that multinational companies operating in Kenya pay a minimum tax rate of 15 percent.

Multinational companies must, however, have a consolidated annual turnover of Ksh 100 billion.

Pension contributions to increase to Ksh 30,000 per month

The pension contribution limit will increase from Ksh 240,000 per year to Ksh 360,000. This amounts to Ksh 30,000 per month for both the employee and the employer.

Introduction of withholding tax on goods supplied to public entities

The bill will also introduce withholding tax on goods supplied to a public entity (such as a government office) at the rate of 0.5 percent for a resident person and 5 percent for a non-resident .

The rates are, however, different from those in the repealed 2024 Finance Bill, as it proposed a rate of 3 percent for resident individuals.

This means that if a resident sells goods worth Ksh100,000, they will pay Ksh500 as tax. On the other hand, a non-resident individual selling the same amount will remit Ksh 5,000.

The bill also aims to introduce a significant economic presence tax which will be imposed on non-resident persons who derive income from the digital market.

It will seek to replace the digital services tax whose previous rate was 1.5 percent. From now on, digital operators will pay a tax rate of 6 percent.

According to Mbadi, the taxation of digital services will align with international best practices.

Infrastructure bonds will be taxable

In the past, infrastructure bonds have attracted investor interest due to their tax-exempt status.

In the repealed finance bill, the government proposed taxing interest earned on infrastructure bonds for residents, with foreigners continuing to be exempt.

The new bill, however, proposes a 5 percent tax rate on interest accrued on infrastructure bonds.

Make KRA PIN mandatory for Kenyans working remotely

Another clause of the repealed Finance Bill that is expected to make a comeback is the mandatory KRA PIN requirement for Kenyans working remotely.

According to the Tax Procedures (Amendment) Bill, 2024, this applies to all employees working remotely outside Kenya for an employee in Kenya.

Affordable housing, tax-deductible CAPS

Contributions paid to the housing levy and to the Social Health Insurance Fund (SHIF) will now be tax deductible if the Taxation Laws (Amendment) Bill, 2024 is passed.

Under the new bill, Kenyans will be entitled to insurance concessions on both contributions, thereby reducing the amount taxable on their income.