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TAX NEWS

NSSF Deductions delayed by Court

Court order temporarily stopping proposed NSSF deductions

The Industrial Court further delayed the full implementation of the 2013 NSSF Act in its eagerly awaited June 25th 2014 ruling.

Our Views on NSSF deductions 

NSSF Deductions

Court order temporarily stopping proposed NSSF deductions.

On the 19th of June, Kenya Plantation and Agricultural Workers Union ("KPAWU"), successfully obtained a temporary court order to stop the new NSSF deductions. The KPAWU application was certified as urgent with the hearing scheduled for 25th June 2014 at 9.00 am for further directions as appropriate.

Our review on NSSF deductions 

Tax Benefits

His Excellency Uhuru issued a Statement on 23rd May 2014 at State House in which he listed remedial measures his Government would take to mitigate the blow the tourism industry has suffered due to terrorism.  Most of the measures are directed at making tourism cheaper through an array of subsidies and reduction of entry fees to national parks, substantive reduction of aeroplane landing charges, among others. Three of the measures he indicated relate directly to taxation. They are as follows:

1. Beginning 12th June 2014, all corporate and business entities will be allowed to pay vacation trip expenses for their staff on annual leave in Kenya and deduct such expenditures in their taxes.

2. Beginning 29th May 2014, there shall be a tax exemption under the 2013 VAT Act on all air ticketing services supplied by travel agents. This is aimed at enhancing Kenya's competitiveness in the region.

3. Any outstanding income tax related refunds amounting owed to the tourism industry players are to be paid out by KRA before 29th May 2014. This measure is expected to improve sector liquidity and cash-flow.

The full Statement which contains all the measures to be taken is available on the Official Website of the President which you may access by clicking here.  

It is noteworthy that these measures do not have the force of law as of yet. It is however anticipated that they will be effected through relevant statutory amendments. We shall keep you updated and inform you as soon as the said remedial measures have been effected through legislative amendments.

Kenya Budget Brief 2014/15

The Kenya FY 2014/15 budget ("budget") was presented to Parliament by the Cabinet Secretary (“CS”), National Treasury on 12th June 2014. The budget has been framed against a backdrop of improving global economic prospects and the realization that growth of emerging markets and developing economies, where Kenya lies, continues to slow down due to new policy challenges.

 

Here we analyze the proposed amendments through the Finance Bill 2014 (yet to be published). We will follow up shortly with a detailed newsletter covering the East African region i.e.  Kenya, Uganda, Tanzania, Rwanda & Burundi  once the respective countries Finance Bills have been published.

 

 

          Attached: Budget brief 2014-15.pdf

Tax Alert :Companies Utilization of Accumulated Tax

On 4th April 2014, the Kenya Revenue Authority ("KRA") issued a public notice on the carrying forward of deficits from previous years. The notice notifies members of the public on the utilization of accumulated tax losses. More importantly on the risk of loss of the accumulated losses for the financial year 2010 & prior years. 

In this tax alert issue, we at Taxwise Consulting Limited analyze what this means to your company and steps to take to mitigate against loss of the accumulated tax losses and thus be able to utilize the losses to offset against subsequent realized taxable profits.

Link: - Companies Utilization of Accumulated Tax

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