The Chairperson of the National Assembly Committee on Finance and National Planning, Kuria Kimani, has assured stakeholders that the forthcoming Finance Act 2024 will provide explicit guidelines to streamline tax procedures and alleviate ambiguities.

Addressing representatives from the banking sector during a breakfast meeting convened by the Kenya Bankers Association (KBA), Kimani emphasized the necessity of clarity in tax regulations.

He underscored that the new act will incorporate specific monthly deadlines for tax remittances to the Kenya Revenue Authority (KRA).

In a statement released by the committee, Kimani acknowledged the challenges stemming from the lack of clear timelines in the previous Finance Act, highlighting its potential contribution to increased tax compliance costs.

Edna Gitachu, a tax policy consultant for KBA, shed light on the ramifications of the Finance Act 2023.

Read More

  1. Proposed 15 per cent tax on social media, internet services could hit Kenya's digital economy
  2. Inside key Govt bill seeking to prioritise local firms in tenders below Sh1 billion
  3. CA allays fears over IMEI registration order by KRA, data privacy concerns

She noted that the act mandated tax payments within five working days, resulting in a staggering 1,300 per cent surge in annual tax transactions.

This surge, she explained, translated into substantial financial burdens on entities, particularly in terms of administrative costs.

"Analysis from our ongoing Total Tax Contribution Report indicates a notable rise in tax payments, with banks witnessing a threefold increase in the average number of tax transactions," Gitachu revealed.

"Additionally, banks incurred approximately Sh1.18 million in supplementary expenses related to staff hiring for tax compliance in 2023."

Kimani further explained that the Finance Act 2024 aims to synchronize with existing legislation to address concerns regarding the implementation of new levies, such as the Housing Levy and the Social Health Insurance Fund.

These concerns, he stressed, revolve around potential conflicts with current employment laws, exacerbating the strain on disposable incomes.

The forthcoming Finance Act 2024 is poised to usher in a more structured tax regime, facilitating smoother compliance processes for entities while mitigating undue financial burdens.

With an emphasis on clarity and alignment with existing laws, stakeholders anticipate a more conducive environment for economic activities in the fiscal year ahead.