The Cabinet Secretary submitted the budget for 2017-18 to the National Assembly on 30 March 2017. the main changes are summarised below:
Dividends paid to non-residents by enterprises operating in Special Economic Zones will be exempt from withholding tax in order to ensure that foreign investors get a good return on their investment. Withholding tax on interest payable to non-residents by special economic zone enterprises will be reduced to 5%.
In order to embolden investors to enter into the housing sector, reduced corporate tax rate has to maintain for developers who construct at least 400 units per year. In the case of new motor vehicle assemblers, the corporate tax rate will be reduced from 30% to 15% for the first 5 years of operation.
A 150% deduction incentive will be applicable to the fishing sector and a 100% investment deduction will be applied for the special economic zone on buildings and machinery.
Individual relief will be increased by 10% and individual income tax bands will be extended by 10%.
An 80% of excise duty will be applicable for locally manufactured beer, millet, cassava or other product except barley and excise duty will be rise from KES 175 per litre to KES 200 per litre on spirits.
White maize will be exempt from duty for a period of 4 months in the case of importation.