Not applicable as this tax is presently suspended in kenya. Value added tax amendment act, 2012 seychelles legal. Pursuant to section 67 of the value added tax act, 20, the cabinet secretary. Value added tax vat according to the value added tax act of kenya, vat is a consumption charge levied on local sales as well as importation of taxable goods and services. The kenya revenue authority kra often takes the position that in such. Vat is a tax on value addition and is accounted for using an inputoutput mechanism. It was previously levied under vat act cap 476 1989. A tax, to be known as value added tax, shall be charged in accordance with the provisions of this act on the supply of goods and services in kenya including anything specified by the minister as such a supply and on the importation of goods and services into kenya. However, in instances where registered persons make taxable supplies without separately identifying vat payable, there has been varying views as to whether the value declared for the supply includes vat payable or not. Analysis of the special economic zones act, 2015 analysis of the special economic zones act, 2015. Edition is a free, personalized email subscription. Contentious issues in value added tax act and administration in nigeria being paper presented at the citn mptp. Vat was introduced in kenya during the budget of the year 1989 to replace sales tax.
Seminar vat act 20 tax september 20 strictly private and confidential. Kenyas general vat rate is 16%, with other rates including 0% that can apply to certain transactions. Value added tax act 1994 is up to date with all changes known to be in force on or before 18 february 2020. Although great care has been taken to ensure that it reflects the correct wording and numbering of the income tax act, cap. There are four types of supplies that attract different vat rates.
In kenya, it is a consumption tax charged on taxable goods and taxable services sold and provided locally or imported into kenya. Vat is an indirect tax on the consumption of goods and services in the economy. The consumer of the taxable commodity or service pays the vat. It expanded the list of goods and services that are exempt from vat. The president of kenya assented to an act of parliament, the finance act, 2019 the act on 7 november 2019. Short title this act may be cited as the tax procedures act, 2015. Value added tax 7 issue 1 chapter 476 value added tax act date of assent. Customs management act and the value added tax act on all sez transactions. The value added tax act, 20 vat act gives the cabinet secretary for the national treasury cs treasury powers to issue regulations to guide the implementation of the vat act.
Revenue is raised for government by requiring certain businesses to register and to charge vat on the taxable supplies of goods and services. Pursuant to section 67 of the value added tax act, 20, the cabinet secretary for the national treasury cs, recently published the vat regulations through legal notice 54 of 2017. Effect of value added tax reforms on revenue collection in. This is an act of parliament that guides levying of value added tax in kenya when was the act enacted. Regulation 18 revocation provides for the revocation of existing vat regulations including. Kenya revenue authority will issue some directive on the. Amendment of section 16 of the value added tax act, 20 is amended by deleting subsection 6 and substituting. The aim of this program is to allow the youth to earn taxfree income from. Exercising these powers, on 7 april 2017 the cs treasury gazetted the value added tax regulations, 2017 vat regulations.
For tax purposes a resident of kenya is defined as anyone who is present in kenya for 183 days during a 12month period. However employees and directors, other than nonresidents, of an epz enterprise are liable to personal income tax. An act to provide for the imposition and collection of value added tax, and for other purposes connected to that tax. Kenyas taxation system covers income tax, valueadded tax, customs and excise duty. An act of parliament to impose a tax to be known as value added tax on goods delivered in, or imported into kenya. The subsidiary legislation seeks to streamline the vat act with the tax procedures act 2015 and will assist in interpretation and implementation of the vat act 20. This act may be cited as the value added tax amendment act, 2007. The value added tax regulations, 2017 timely update. Value added tax act, 2014 c value added tax act, 2014 an act to provide for the imposition assessment and collection of value added tax on the supply and importation of goods and services in the bahamas and for connected matters enacted by the parliament of the bahamas part i preliminary 1. An act of parliament to make amendments to taxrelated laws enacted by the parliament of kenya, as follows 1. Its objective was to protect low income citizens from the rising prices of basic commodities ensuing from the enactment of the vat act 20. The income tax act, value added tax, excise duty act, tax procedures act and miscellaneous fees and levies act. Nigerian value added tax system and the concept of basic food. Licensing of an epz shall not include activities that are commercial in nature but manufacturing.
It is levied on the price of a product or service at each stage of production, distribution or sale to the end consumer, except where a business is. The current vat act was passed into law on 2 september 20 and its implementation has. Highlights of value added tax amendment act, 2017 act. Revised legislation carried on this site may not be fully up to date.
Value added tax is a tax on the amount of which the value of an article has been increased at each stage of its production or distribution. Kenya amends valueadded tax act executive summary kenyas valueadded tax vat amendment act 2014 came into effect on 29 may 2014. The effect of value added tax on economic growth in kenya. While the incentive to offer amnesty may have been to entice more investment. Value added tax vat is charged under the value added tax act 20 on the supply of taxable goods and services and the importation of taxable goods and services into kenya.
The valueadded tax vat is administered by the kenya revenue authority. The act proposes key amendments to various tax legislation in kenya including. Schedules to the current vat act list goods and services that are exempt from vat or are taxable at zero rate. The effect of value added tax on economic growth in kenya lawrence kimuhu njogu. Epzs are exempt from corporate tax during the first 10 years. A valueadded tax vat, known in some countries as a goods and services tax gst, is a type of tax that is assessed incrementally. This hand book titled domestic tax laws is primarily intended for internal use by officers and staff of the uganda revenue authority. Kenya is a member of the east africa community eac member trading bloc, which may affect international vat collection and regulations. Kenya miscellaneous fees and levies act 29 of 2016. Charge to tax 1 a tax, to be known as value added tax, shall be charged in accordance with the provisions of this act on a a taxable supply made by a registered person in kenya. Value added tax, 2005 malawi legal information institute.
Pdf nigerian value added tax system and the concept of. Mini auction for reoffers scheduled to take place on 29th january 2020 at customs warehouse kilindini. Further, the finance bill 2017 had proposed to exempt from vat taxable. Appeals shall be as in the federal inland revenue service act. There are changes that may be brought into force at a future date. The value added tax act 2014 the united republic of tanzania no. The vat rates in respect of exports and other essential goods is 0%. These businesses become vendors that act as the agent for government in collecting. An act to impose a tax on the supply of goods and services in zambia and the. Changes and effects are recorded by our editorial team in lists which can be. Agenda 1 introduction 1 2 changes in interpretation 10 3 rates of tax. The act was assented to on 14th august 20 by the president and the commencement date was 2nd september 20.
Value added tax levied at each stage on value added in the economic chain of supply and it is a. Kenyas finance act, 2018 the act was assented into law by the president on. Value added tax act 1996 uganda legal information institute. Introduction valueadded tax vat is an indirect tax levied under the value added tax act 20. This is the vat charged to the customer by a taxable person making taxable supplies. South african institute of chartered accountants integritax newsletter income tax and vat acts online the income tax act, 1962, valueadded tax act, 1991 and other tax acts may be accessed on the sars website the consolidated income tax act is available, in a pdf version, under the tax heading on the university of pretoria, laws of sa consolidated legislation website.
International academic journal of economics and finance, 1 5, 1030. The corporate tax rate is 25% commencing from the 11th year. Vat is a multistage tax levied at each stage of the value addition chain, with a provision to allow input tax credit itc on tax paid at an earlier stage, which can be appropriated against the vat liability on subsequent sale. This act may be cited as the value added tax act, 20. Vat law requires that the taxable value of a supply, unless the parties thereto are related, be the consideration for the supply. Types of taxes in kenya and rates,vat,custom duty,and. I certify, in accordance with section 2 1 of the acts authentication act, cap.
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