The Value Added Tax (Amendment of the Rate of Tax) Order, 2020 (“The Order”) was published by the Cabinet Secretary for the National Treasury and Planning on 26th March 2020.
The Order amends section 5 (2) (b) of the Value Added Tax Act, 2013 which imposes Value Added Tax on the value of taxable goods and services.
The Order was made pursuant to a directive issued by the President on 25th March 2020 meant to cushion Kenyans against economic effects of the COVID-19 Pandemic.
The Order reduces the rate for Value Added Tax from sixteen per cent (16%) to fourteen per cent (14%).
The reduction of the rate to fourteen per cent (14%) lowers the tax liability for taxable goods and services under the Value Added Tax Act, 2013 by up to 12.5%.
In addition to the Order, the President in his address on 25th March 2020 directed the Kenya Revenue Authority to expedite the payment of all verified claims for Value Added Tax refunds amounting to Ksh. 10 Billion by 15th April 2020.
Please note that the Order came into force on 1st April 2020. However, the order is required to be tabled in the National Assembly for approval.
The Order can be found here.
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