The National Treasury is working on ways of making tax regime stable so that the Finance Bill can be considered once every three years. FILE PHOTO | NMG New taxes on goods and services will be introduced every three years instead of annually if proposals by the Treasury are adopted.
The National Treasury has informed the Finance Committee of the National Assembly of plans to review the period for publishing the Finance Bill—which contain proposals of the government for levy of new taxes or modification of the existing tax structures.
This will offer relief to firms like East African Breweries Ltd (EABL) that have in recent years asked the Treasury to adopt a regular, predictable tax increases rather than big moves every year.
“The National Treasury was working on ways of making tax regime stable so that the Finance Bill can be considered once every three years,” said a notice by the committee.
The plan, if implemented, will be welcomed by the business community who have for years been agitating for a predictable and stable taxation regime to help firms plan for long-term investment strategies.
East African Breweries, the giant brewer which is 50.03 per cent controlled by UK’s Diageo, has been one of the vocal firms unhappy with rise in taxation almost on a yearly basis.
Beer and spirits fall within the “sin tax” basket which have been the soft targets as the Treasury aims to grow taxes to meet rising expenditure and cut borrowing.
“A predictable policy and regulation environment will help firms plan five, 10 years out,” EABL chairman Charles Muchene said last year. EconomyBanks saved from increase in core capital to Sh5bn
“This is not necessarily about fixing everything where it is, but creating an environment where changes in future are going to be predictable and people can plan around those changes.”
Most of the taxation measures introduced in the 2018 Finance Bill drew outrage from businesses and consumers, prompting MPs to vote them out last Thursday.
MPs voted to delay a proposed 16 per cent tax on petroleum products for two more years, citing the high cost of living – a move that will be a blow to government efforts to raise revenues through higher taxes.The also rejected a “Robin Hood” tax of 0.05 per cent on bank transfers of over Sh500,000 ($5,000) during Thursday’s session and an employee contribution scheme towards the national housing development fund.The rejected tax increases were designed to […]