Kenyan President, William Ruto on Wednesday quietly signed into law the Tax Laws (Amendment) Bill 2024, along with six other parliamentary bills. These laws aim to accelerate the Kenya Kwanza administration’s agenda.
Notably, the new laws take effect immediately, as they do not include a phased implementation schedule.
Components of The 2024 Tax Laws Amendment Bill
The Bills assented to by the president are the Tax Laws (Amendment) Bill 2024, the Kenya Revenue Authority (Amendment) Bill 2024, the Kenya Roads (Amendment) Bill 2024, the Ethics and Anti-Corruption Commission (Amendment) Bill 2024, and the Statutory Instruments (Amendment) Bill 2024.
Other components of the law are the Tax Procedures (Amendment) Bill 2024, and the Business Laws (Amendment) Bill 2024,
Key Aspects of The Laws
The Tax Laws (Amendment) Bill 2024 broadens the scope of digital taxation. It expands the definition of the digital marketplace to include income from ride-hailing services, food delivery platforms, freelance work, professional services, and content creation. This move aims to capture revenue from Kenya’s growing digital economy.
The Tax Procedures (Amendment) Bill 2024 introduces standardized requirements for electronic tax invoices. These include mandatory supplier identification and timestamps to reduce tax fraud and enhance reporting accuracy.
The Public Finance Management (Amendment) Bill 2024 provides the national government with greater flexibility in borrowing and asset guarantees. This measure aims to balance Kenya’s immediate funding needs with long-term debt sustainability as the country navigates fiscal challenges.
Significance
With the presidential assent granted to the 2024 tax amendment bills, the Kenyan administration is on the path towards stabilizing the country’s finances.
The government expects these laws to stabilize the country’s finances, which have been under strain due to the lingering effects of COVID-19. Recent financial pressures forced Kenya to opt for an 8.9% interest loan from the UAE after delays in IMF loan approvals.
The signing of the laws follows the abandonment of the controversial Finance Act 2023, which sparked widespread and violent protests across the country.
The secrecy surrounding the new laws’ enactment raises questions about the readiness of the mechanisms required for their implementation and as Kenya grapples with its fiscal challenges, the success of these new measures remains to be seen.
President Ruto’s administration would however be hopeful that these reforms will spur economic recovery and ensure long-term financial stability in Kenya.
