The President of the Republic of Kenya assented to the new Finance Act, 2019 (the “Act”) on 7^th November, 2019. The Act which amends various laws relating to taxes and duties comes into effect on various dates as expounded below.

1. With effect from 7^th November 2019, the following amendments shall apply in relation to Excise Duty:
   1. The time of supply in relation to a betting transaction has been defined as the time a person wagers or stakes money on a platform or other medium provided. The amount wagered or staked has been defined as the amount of money placed by a person for an outcome in a betting transaction. Excise duty will be charged at the rate of 20% on the amount wagered.
   2. Excise duty on cigars, cigarettes, manufactured tobacco and manufactured tobacco substitutes, wines and spirits of undenatured ethyl alcohol, spirits liqueurs and other spirituous beverages of alcoholic strength exceeding 10% (commonly referred to as sin tax) has been significantly increased.
   3. Excise Duty on Motor Vehicles:
      1. The excise duty of motor vehicles of cylinder capacity exceeding 1,500cc under tariff code 87.02, 87.03 and 87.04 has been increased to 25%.
      2. The excise duty on motor vehicles of tariff code 8703.24.90 (Petrol powered cars with an engine rating exceeding 3000cc) and 8703.33.90 (Diesel powered cars with an engine rating exceeding 2500cc) has been increased to 35%.
      3. Excise duty on 100% electric powered motor vehicles of tariff code 87.02 and 87.03 has been reduced from 20% to 10%.
   4. Excise duty relating to sugar confectionary including white chocolate has been increased.
   5. Excise duty of 35% has been introduced on imported gas cylinders.

    

   2. With effect from 7th November 2019, the following amendments shall apply in relation to Tax Procedures:
   1. The Commissioner has been empowered to exempt persons from the compulsory Personal Identification Number (PIN) requirement in certain circumstances under the First Schedule of the Tax Procedures Act. Further, mandatory the registration and renewal of membership by professional bodies and other licensing agencies and the registration of mobile cellular pay bill and till numbers by telecommunication operators have been included as transactions for which a PIN is required.
   2. The Commissioner has been empowered to recover taxes not deducted or withheld, penalties and interest from withholding tax agents who do not withhold taxes as if the taxes were due and payable by the agent. The due date for calculation of penalties and interest shall be the date such taxes should have been remitted to the Commissioner.
   3. The rate of withholding VAT on purchase of taxable supplies has been reduced from 6% to 2%.

    

   3. With effect from 7th November 2019, the following amendments shall apply to Miscellaneous Fees and Levies Act:
   1. Import Declaration Fee (IDF) has been increased from 2% to 3.5% of the customs value of the imported goods except raw materials and intermediate goods.
   2. IDF for raw materials and intermediate products imported by approved manufacturers has been reduced from 2% to 1.5%.
   3. IDF on inputs for the construction of houses under the affordable housing scheme approved by the CS for Treasury on recommendation by the CS responsible for Housing has been reduced from 2% to 1.5%.
   4. Railway Development Levy (RDL) has been increased from 1.5% to 2% of the customs value of the imported goods except raw materials and intermediate goods.
   5. RDL rate of 1.5% has been maintained for raw materials and intermediate goods imported by approved manufacturers and inputs for the construction of houses under the affordable housing scheme approved by the CS for Treasury on recommendation by the CS responsible for Housing.
   6. The Commissioner has been empowered to refund the Anti-adulteration levy paid by an importer where Commissioner is satisfied that the levy was paid in respect of illuminating kerosene that has subsequently been used by a licensed or registered manufacturer to manufacture paint, resin or shoe polish.
   4. Section 33B of the Banking Act on the cap on interest rates charged on loans offered by commercial Banks has been repealed. However, any agreement issued pursuant to the repealed section shall continue to be in force on such terms, including interest rates, and for the duration specified in the agreement. The interest rates for such agreements may be varied downwards.
   5. The transfer of a house constructed under an affordable housing scheme from the developer to the National Housing Corporation shall be exempt from Stamp Duty.

    

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