Finance Bill 2023 officially tabled in Parliament, Housing levy reduced to 1.5 %

Top of the concessions made in the amended bill is the Housing Levy contribution by employers and employees that has been reduced from 3 to 1.5 per cent, effective as soon as the President ascends to the bill if it passes through parliament. 

Withholding tax for Digital Content Creation has also been reduced from 15 to 5 per cent. 

20% VAT on Gaming and Betting has been reduced to 12.5% while the mandatory 20% of the contested amount deposit to KRA for lodging Tax Appeal has been repealed. 

TAX Rental Income has also been reduced from 10 to 7.5%.

The deadline for submitting withholding tax to KRA has also been extended to 5 working days from the previously proposed 24 hours. 

Income Tax, Pay as You Earn for employees earning between Ksh.500,000-Ksh.800,000 has been reduced from 35 to 32% as those earning more than Ksh.800,000 subjected to 35 percent income tax. 

Electric cars, motor vehicles and solar batteries have been zero-rated. 

The corporate Turn Over Tax has been lowered from a maximum threshold of Ksh.50 million to Ksh.25 million. 

However, the increased 16% VAT on petroleum products remained unchanged. 

Insurance compensation on taxable supplies is 16% VAT.

The Finance Committee introduced 16 per cent VAT on Business Transfers in order to recover Ksh.100 billion lost through the reduction of housing levy. 

The amended Finance Bill 2023 seeks to raise Ksh.311 billion which is Ksh.100 billion higher than the initial bill. 

With the House Business Committee having subsequently approved the debate schedule of the bill on Wednesday, a showdown looms between the ruling Kenya Kwanza and Azimio la Umoja legislators who are opposed to the Bill.