Ruto signs 7 bills to fast-track his Bottom-Up agenda

President William Ruto has signed into law seven bills, which will impact ordinary Kenyans, businesses, and government agencies.

These include the Kenya Revenue Authority (Amendment) Bill 2024, the Kenya Roads (Amendment) Bill 2024, the Ethics and Anti-Corruption Commission (Amendment) Bill 2024, the Statutory Instruments (Amendment) Bill 2023, the Business Laws (Amendment) Bill 2024, the Tax Procedures (Amendment) Bill 2024, and the Tax Laws (Amendment) Bill 2024.

The Bills were prioritised by the National Assembly before their Christmas recess and are aimed at facilitating the realisation of Ruto’s Bottom-Up Economic Transformation Agenda.

Key tax provisions passed

Extension of tax amnesty program

Lawmakers extended the tax amnesty period from December 31, 2023, to June 30, 2025. This change gives taxpayers more time to settle their obligations without penalties.

However, the Finance and Planning Committee noted that the longer period might result in revenue losses for the government.

Reduced penalty for KRA system non-compliance

The penalty for businesses failing to integrate with Kenya Revenue Authority (KRA) systems was reduced from Sh500,000 to Sh100,000.

Additionally, the committee ensured that businesses will only be required to submit financial data, such as sales, while excluding trade secrets and sensitive information about parent companies in the case of subsidiaries.

Tax measures rejected

10% penalty on withholding VAT remains

Despite appeals from the public to abolish the 10% penalty for late remittance of withholding VAT, legislators upheld this provision. They argued that the penalty is necessary to enforce compliance and ensure timely payment of taxes.

No change in withholding tax remittance deadlines

A proposal to extend the deadline for remitting withholding tax from the 5th working day to the 20th of the following month was declined. Lawmakers stated that the current timelines ensure efficiency in tax collection and administration.

Proposal to harmonise statutory deductions

A suggestion to consolidate statutory deductions, such as NSSF and NHIF contributions, into a single payment date was rejected. The committee emphasised that existing timelines are governed by specific laws and should remain as they are.

16% VAT on betting

The proposal to impose a 16% VAT on betting activities was turned down. MPs argued that high taxes on betting would not deter the activity but might drive it underground, making it harder for the KRA to monitor.

Infrastructure bonds remain tax-free

Treasury Cabinet Secretary John Mbadi had proposed a 5% withholding tax on infrastructure bonds. This proposal was shot down by legislators, who highlighted the importance of keeping the bonds tax-free to encourage investment in infrastructure projects.

Implications of the new laws

President Ruto's assent to these Bills marks a significant step in his administration's efforts to implement its Bottom-Up economic agenda.

The amendments aim to balance revenue generation with fostering economic growth and encouraging compliance.