Pwc kenya 2 finance act, 2018 indirect taxes value added tax introduction the finance act introduces a raft of changes in the vat treatment of various supplies. With acts you are guaranteed the latest and most up to date resource for your legislative needs. The value added tax act, 2014 arrangement of sections section title part i preliminary provisions 1. Value added tax act, 20 act 870 communication service tax act, 2008 act 754 value added tax amendment no.
The supply of telecommunications services is deemed to be made in kenya if the person initiating the supply is in kenya at the. Part ii imposition of value added tax a imposition and exemptions 3. The amendment makes all interest earned by a resident individual qualifying interest taxable at 15% withholding tax being final tax and not 30% as is the case at present. Not applicable as this tax is presently suspended in kenya. Value added tax general amendment regulations, 2017 no. An act of parliament to amend the law relating to various taxes and duties and for matters incidental thereto enacted by the parliament of kenya, as follows part i preliminary 1. Pursuant to section 67 of the value added tax act, 20, the cabinet secretary for the national treasury cs, recently published the vat regulations through legal notice 54 of 2017. The kenya revenue authority kra often takes the position that in such. This hand book titled domestic tax laws is primarily intended for internal use by officers and staff of the uganda revenue authority.
The effect of value added tax on economic growth in kenya lawrence kimuhu njogu. However, in instances where registered persons make taxable supplies without separately identifying vat payable, there has been varying views as to whether the value declared for the supply includes vat payable or not. Applies to all commercial activities involving productiondistribution of goodsservices. An act to provide for the imposition and collection of value added tax, and for other purposes connected to that tax. Or, if you reasonably expect that during the next 3 calendar months the total value of your taxable what is vat. Kenya miscellaneous fees and levies act 29 of 2016. It expanded the list of goods and services that are exempt from vat. The value added tax act 2014 the united republic of tanzania no. The finance act, 2018 repealed section 7a of the income tax.
An act of parliament to make amendments to taxrelated laws enacted by the parliament of kenya, as follows 1. Sep 09, 2019 value added tax is commonly known as vat. The value added tax act, 1991 was enacted that year and vat started its passage from 10 july 1991. Any changes that have already been made by the team appear in.
The value added tax act, 20 has been amended by reducing the standard rate from 16% to 14%. Nonresidents who supply telecommunication services. Although great care has been taken to ensure that it reflects the correct wording and numbering of the income tax act, cap. Kenya amends valueadded tax act executive summary kenyas valueadded tax vat amendment act 2014 came into effect on 29 may 2014. Commissioner may appoint upon failure of the nonresident to do so. A valueadded tax vat, known in some countries as a goods and services tax gst, is a type. The value added tax regulations, 2017 timely update. A tax, to be known as value added tax, shall be charged in accordance with the provisions of this act on the supply of goods and services in kenya including anything specified by the minister as such a supply and on the importation of goods and services into kenya. The act proposes key amendments to various tax legislation in kenya including. Reduction of the standard rate from 16% to 14% the measure the value added tax act, 20 has been amended by reducing the standard rate from 16% to 14%. The changes, which come into effect on 1 july 2018, will have signi. The valueadded tax vat is administered by the kenya revenue authority. Archived pdf from the original on 24 september 2016. Charge to tax 1 a tax, to be known as value added tax, shall be charged in accordance with the provisions of this act on a a taxable supply made by a registered person in kenya.
In this act, unless the context otherwise requires. There are outstanding changes not yet made by the legislation. The research design adopted in this study was causal study. This short title and act may be cited as the finance act, 2018. Report on vat regulations, 2019 parliament of kenya. Kenya value added tax act 20 previous next chapter 2 scope of vat. Value added tax act, 20 an act to revise and consolidate the law relating to the imposition of the value added tax and to provide for related matters. The vat act 20 defined the taxable value of a supply as the total open market value of the supply, the amount paid for the supply and any taxes duties, levies, fees and charges other than vat paid for it. Vat was introduced in kenya during the budget of the year 1989 to replace sales tax.
Prior to the vat act, the bahamian tax system relied principally on border taxes, namely, customs and excise duties. Income tax and vat acts online the income tax act, 1962, valueadded tax act, 1991 and other tax acts may be accessed on the sars website. Analysis of the special economic zones act, 2015 analysis of the special economic zones act, 2015. The value added tax act, 20 is amended by repealing section 40. Vat is a general consumption tax assessed on the value of goods and services. Types of taxes in kenya and rates,vat,custom duty,and. Visit this page for an executive summary of kenyas tax structure and rates, by salestaxhandbook. Value added tax act 1996 uganda legal information institute. The effect of value added tax on economic growth in kenya. The current vat act was passed into law on 2 september 20 and its implementation has. Kenya has a national valueadded tax vat of 16% as of 2020, administered by the kenya revenue authority.
Those changes will be listed when you open the content using the table of contents below. Passed by parliament and assented to by the president. Exercising these powers, on 7 april 2017 the cs treasury gazetted the value added tax regulations. The president of kenya assented to an act of parliament, the finance act, 2019 the act on 7 november 2019. Value added tax 7 issue 1 chapter 476 value added tax act date of assent. The stamp duty act cap 480 amendment provisions will become effective 1 october 2018. It is intended to raise additional revenuefor the government of the bahamas by means of value added tax vat. The income tax act, value added tax, excise duty act, tax procedures act and miscellaneous fees and levies act. The value added tax act, 20 vat act gives the cabinet secretary for the national treasury cs treasury powers to issue regulations to guide the implementation of the vat act. Value added tax vat is a consumer tax charged on the supply of taxable goods or services made in kenya and on the importation of taxable goods.
Customs management act and the value added tax act on all sez transactions. Pwc september 20 32 seminar vat act 20 section 8 deduction of input tax items restricted under. Pursuant to section 67 of the value added tax act, 20, the cabinet. Exercising these powers, on 7 april 2017 the cs treasury gazetted the value added tax regulations, 2017 vat regulations. Value added tax general amendment regulations, 2017.
An act to impose a tax on the supply of goods and services in zambia and the. Background and kpmg kenyas assistance the vat act provides that a person who in the course of a business, makes taxable supplies or. Introduction valueadded tax vat is an indirect tax levied under the value added tax act 20. Vat is a tax on supply on taxable goods and services introduced in kenya in. Tax to be charged on taxable supplies and imported goods. Kenya is a member of the east africa community eac member trading bloc, which may affect international vat collection and regulations. Repeal of section the value added tax act, 20 is amended by repealing section 41. The target population for this study consisted of the quarterly reports on the state of the kenyan economy in relation to productivity. Calculation of tax payable by taxable person for a tax period.
There are four types of supplies that attract different vat rates. Section 6 1 of the vat act empowers the cabinet secretary cs to alter the vat rate upwards or downwards by an amount not exceeding 25% of the prevailing rate. In exercise of the powers conferred by section 67 of the value added tax act, 20, the. Evolvement of value added tax vat in kenya 2 seminar vat act 20 section 1 introduction sales tax vat act, 1990 vat act, 20. It was previously levied under vat act cap 476 1989. The consolidated income tax act is available, in a pdf version, under the tax heading on the university of pretoria, laws of sa consolidated legislation website. This statutory instrument came into force on the day it was gazetted, 16th february 2017. Acts online provides legislation, including amendments and regulations, in an intuitive, online format. Regulation 18 revocation provides for the revocation of existing vat regulations including.
Value added tax refund on bad debts summary this alert brings to your attention the provisions of section 31 of the value added tax act vat act, 20 on the refund of tax on bad debts. Valueadded tax act 89 of 1991 south african government. On 18 july 2018, kenyas president assented to the tax laws amendment act, 2018. Vat is a tax on value addition and is accounted for using an inputoutput mechanism. Value added tax act, 2014 c value added tax act, 2014 an act to provide for the imposition assessment and collection of value added tax on the supply and importation of goods and services in the bahamas and for connected matters enacted by the parliament of the bahamas part i preliminary 1. Provisions regarding the income tax act ita cap 470 and value added tax act vat act cap 476 became effective retroactively on 1 july 2018. We are the leading resource for freely available legislation in south africa and are used daily by thousands of professionals and industry leaders. Revenue is raised for government by requiring certain businesses to register and to charge vat on the taxable supplies of goods and services. South african institute of chartered accountants integritax newsletter income tax and vat acts online the income tax act, 1962, valueadded tax act, 1991 and other tax acts may be accessed on the sars website the consolidated income tax act is available, in a pdf version, under the tax heading on the university of pretoria, laws of sa consolidated legislation website. Vat law requires that the taxable value of a supply, unless the parties thereto are related, be the consideration for the supply.
The value added tax act, 2014 vat act came into force 01 january 2015. The kenya revenue authority kra often takes the position that in such cases the. Section 44 of the value added tax act, 20 is amended by deleting subsections 2, 3, 4 and 5. The studys objective was to determine the effect of value added tax on economic growth in kenya. Its objective was to protect low income citizens from the rising prices of basic commodities ensuing from the enactment of the vat act 20. Amendment of section 16 of the value added tax act, 20 is amended by deleting subsection 6 and substituting therefor the following new subsection section 16 of no. Enacted by the parliament of kenya, as follows part i preliminary 1. The subsidiary legislation seeks to streamline the vat act with the tax procedures act 2015 and will assist in interpretation and implementation of the vat act 20. Section 20 of the principal act is amended by substituting for paragraph athe followinga areexempt from customs duty under thefifth schedule of the east african community customs management act, 2004 except compact fluorescent bulbs with a power. Vat is an indirect tax on the consumption of goods and services in the economy.