On 15 June 2023, the Finance Minister presents the Budget for 2023/24 to the Parliament providing a comprehensive overview of the tax and associated measures, as well as the suggested priorities and changes for various sectors. The main tax measures of the Budget include:
- Exempt Capital Gain Tax on internal restructuring of the mining companies in accordance with the Framework Agreement entered between the Government and the investor to form a partnership entity.
- Reduce Capital Gain Tax from 10% on profits to 3% of the sales value or the appraised land value, (whichever value is higher) regardless of the costs invested in the relevant areas (investment costs) for property sellers who do not keep records of expenses. However, the investors who keep records of their expenses and capital development, will continue to apply a tax rate of 10% on the capital gain.
- Introduce the Income Tax at the rate of 2% of payments to Artisanal and Small Miners (ASM).
- Amend the Income Tax Act, CAP 332 in order to grant income tax exemption on revenue generated from investment returns (such as dividend from shares, treasury bonds and bills) of the National Health Insurance Fund.
- increase Value Added Tax (VAT) registration threshold from 100 million shillings to 200 million shillings.
- The budget includes VAT exemptions on specific items such as inputs for insecticides and packaging materials manufacturing, imported prefabricated structures for poultry farmers, molds for pharmaceutical manufacturers, supplies of precious metals and gemstones at designated locations, and the sale/lease of aircraft and aircraft parts by local air transportation operators. Additionally, the VAT exemption on air charter services, which was removed in the previous financial year, will be abolished.
