UPDATE: Kenyans have a reason to smile after President Uhuru Kenyatta signed the Tax Laws Amendment Bill on Saturday, April 25.
The president inked the bill at State House before his state address along with Mombasa Governor Ali Hassan Joho, Kilifi Governor Amason Kingi and Kwale Governor Salim Mvurya.
The bill was passed by Parliament on Thursday, April 23 to cushion Kenyans from the negative effects of Covid-19 on the economy.
Some of the amendments include a raise in the threshold for a turnover tax to between one million and fifty million shillings so as to exclude small-scale traders from the presumptive tax and lowering the turnover tax rate from 3 to 1%. Kenyans who earn less than Ksh 24,000 will now enjoy 100% tax relief. Those earning above Ksh 24,000 will now pay a maximum of 25% down from 30%.
Kenyans are set to enjoy a slight increase in their net salary after Parliament on Wednesday, April 22, passed the Tax Laws (Amendment) Bill.
This will hand Kenyans some reprieve as the Kenya Revenue Authority had indicated that the salary tax reductions would not take effect until the bill became law.
The new tax rates now only wait for the President's signature to become law to take effect.
President Uhuru Kenyatta on Wednesday, March 25, announced the tax reliefs to cushion Kenyans against the Covid-19 effects on the economy.
Kenyans who earn a monthly salary of Ksh 24,000 and below are set to enjoy a 100% tax relief meaning that their salary will not be subjected to tax.
Those earning Ksh. 24,000 will now be able to save Ksh1,583 more that was previously taken away by the taxman.
This is set to benefit a number of Kenyans as the previous salary tax exemption was set for those earning up to Ksh13,486.
Those earning Ksh30,000, 40,000 and 50,000 will now pocket an excess of Ksh2,000, Ksh2,400 and Ksh3,400 respectively.
For Kenyans earning Ksh75,000, their net salary is set to increase by Ksh. 4,500 while those with a Ksh100,000 income will save Ksh. 5,800.
If you earn Ksh200,000 or Ksh. 300,000 you will save significantly more in the region of Ksh10,000 and Sh15,000 respectively.
A monthly salary of half a million and a million will see you saved up to Ksh25,000 and Ksh50,000 in a month respectively.
Depending on the amount one contributes towards insurance and pension as well as mortgages or homeownership plan deductions Kenyans stand a chance of saving Ksh 2,400 up from Ksh1,408 due to the new tax relief.
