New Income Tax Bill

NEW INCOME TAX RATES

The National Treasury commenced the review of the present Income Tax Act in order to make it productive, simple to comply with and supportive of the growth of the economy in order to achieve Vision 2030.

Reasons why the current Income Tax Act is being changed in Kenya

  1. The ITA became effective in 1974 but has undergone amendments through the various Finance Acts making it complex overtime
  1. Need to simplify ITA as well as make it an effective tool towards facilitation of growth of the economy
  1. Need to align it with international best practice to reflect the modern business environment
  1. Raise Tax
  1. Promote savings and investments by removing disincentives
  1. Equitable distribution of income
  1. Buoyant and elastic tax system
  1. Reduce compliance and administrative costs
  1. Seal leakage loop holes
  1. Growth of capital market
READ:   Only a third of 2015 KCSE candidates attained university entry mark

Newly published Income Tax Bill will have higher tax rate for those earning more than Sh9 million per year, efficiently pursuing those with a monthly income of Sh750,000/= and above.

The newly proposed Income tax rates in the new Income Tax Act

INDIVIDUAL RATES                %

On the first Sh 147,58010
Sh 147,581 – Sh 286,62315
Sh 286,624 – Sh 425,66620
Sh 425,667 – Sh 564 ,70925
Sh 564,710 – Sh 9,000,00030
All income over Sh 9,000,00035
RPORATE TAX RATES
Taxable income up to Sh500 million30%
Income above Sh500 million35%
CAPITAL GAIN TAX RATE
Current5%
Proposed new tax rate20%
READ:   KNEC KCSE 2014 Results Download

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