Legal Alert | Kenya | Finance Act 2018: The Impact of Changes to Tax Planning
The National Assembly passed the Finance Bill, 2018 on 30 August 2018 and presented to the President for assent on 13 September 2018. Under Article 115 the Constitution of Kenya, the President instead issued his reservations in a Memorandum and the National Assembly had a special sitting on 20 September 2018 to debate and vote on the reservations.
In the interim, in a case filed by a public interest activist, the High Court has ruled that the provisions of the Bill cannot be implemented before being passed by the National Assembly and assented to by the President.
The case had been instituted following the imposition of the new taxes proposed in the Bill, instigated primarily by VAT on petroleum products. The imposition of tax was effected through the Provisional Collection of Taxes and Duties Order, 2018 issued by the Cabinet Secretary for National Treasury and Planning under the provisions of the Provisional Collection of Taxes and Duties Act (the PCTDA). The High Court in its ruling on 19 September 2018 declared the PCTDA and the Order unconstitutional. All provisions of the Bill, including those of taxation, were in effect barred from implementation before the Bill became an Act of Parliament.
Following the recent Presidential assent of the Bill on 21 September 2018, we highlight the changes which have been introduced by the Finance Act, 2018, particularly those that had earlier not been proposed in the Bill.
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The content of this alert is intended to be of general use only and should not be relied upon without seeking specific legal advice on any matter.