RWK Financial Compass

  In a significant ruling that has both stirred debate and provided clarity, the High Court of Kenya on 22 nd October 2024 upheld the constitutionality of the Housing Levy. This decision marks a pivotal moment in Kenya’s vision for affordable housing, potentially affecting millions of Kenyans by ensuring continued funding for housing projects. The Ruling: The three-judge bench dismissed petitions against the levy, arguing that the process leading to its enactment included adequate public participation. The court's decision supports Section 4 of the Affordable Housing Act, which mandates a 1.5% deduction from gross salaries , highlighting its alignment with constitutional principles aimed at achieving societal good through affordable housing.

  The Kenyan government has announced a bold move to transform all M-PESA paybills and Till numbers into virtual Electronic Tax Registers (ETRs) by December 25, 2024. This initiative is part of the government’s broader strategy to integrate mobile money transactions into the tax framework, aimed at improving compliance and capturing previously unreported business activities. As mobile money plays a critical role in Kenya’s economy, this new directive has far-reaching implications for businesses, consumers, and the national revenue collection system. The Process Implementation Timeline and Scope Deadline: December 25, 2024. Scope: All M-PESA paybills and Till numbers will be converted into virtual Electronic Tax Registers (ETRs). Steps for Integration System Integration : KRA will collaborate with mobile service providers (e.g., Safaricom) to ensure that M-PESA paybill and Till transactions are seamlessly integrated into KRA’s tax systems. Monitoring Mechanism : KRA will monitor all tra

                                                              Social Health Authority Registration The  Social Health Authority (SHA)  in Kenya is set to officially launch on  October 1, 2024 , marking a significant transition from the National Hospital Insurance Fund (NHIF). As of late September 2024, approximately  1.2 million individuals  have registered under the new SHA scheme. STEPS FOR REGISTRATION To register for the  Social Health Authority (SHA)  in Kenya, follow these steps: Online Registration Visit the SHA Website : Go to  SHA.go.ke . Click the “Register Individual” or “Register employers ”Button on the homepage. Fill Out the Registration Form : Enter your personal details, including: National ID Number Phone Number (for OTP verification) Click “Proceed” : Submit your information and move to the next step. Select ID Type : Choose “Kenyan Citizen” as your ID type. Enter Your Natio

  Effective September 1, 2024, the Kenyan government has introduced a new levy that directly impacts contractors and suppliers providing goods and services to both national and county governments. This levy is part of a broader strategy to enhance compliance and streamline public procurement processes. In this newsletter, we will outline the key details of the levy, its applicability, and the obligations for both suppliers and procuring entities.

  The Tax Procedures (Amendment) Bill, 2024, recently introduced to Parliament, seeks to amend key provisions of the Tax Procedures Act. These amendments are designed to provide relief to taxpayers and improve tax compliance. The changes include extending tax amnesties, allowing relief in difficult tax recovery cases, and revising timelines for filing tax objections. This newsletter outlines the major updates and their implications for businesses and individual taxpayers. Tax Amnesty Extension One of the notable amendments is the extension of the tax amnesty period, which was previously set to expire on June 30, 2024. The new deadline is now June 30, 2025, giving taxpayers an additional year to settle their principal tax without facing penalties or interest. This extension aims to encourage compliance by offering relief to those who may have struggled to meet the earlier deadline . Relief for Unrecoverable Taxes The Bill introduces a new provision that allows the Commissioner t

Appointment of Rental Income Tax Agents in Kenya The Finance Act, 2023 introduced Section 42C to the Tax Procedures Act, granting the Commissioner of the Kenya Revenue Authority (KRA) the authority to appoint rental income tax agents. These agents are responsible for collecting and remitting rental income tax on behalf of taxpayers to the Commissioner. Appointment Process The Commissioner appoints rental income tax agents in writing and notifies them of the requirement to withhold tax on rental payments. Notices of appointment can be sent through electronic means. The target agents are typically large tenants and property management companies. Obligations of Appointed Agents Withhold tax at a flat rate of 7.5% on the gross rent paid to resident landlords. Remit the withheld tax to KRA by the 20th day of the month following the rent payment. Provide the landlord with a certificate stating the amount of rent and tax deducted.