Timothy Thambu

W&TAdvocates: Tax and Corporate Lawyer

[Julians Amboko @AmbokoJH]

Is your hard earned money working for you?
Or is just lying idle & getting eroded as costs rise?

Come with me as we explore the capital markets & the vast array of opportunities that exist for us unlock value for our hard earned money.

Over the coming weeks, we will be unpacking various asset classes including stocks, government securities (Treasury Bills & Bonds), derivatives, money market funds, special funds & more to ensure we are all equipped with the right information.

Also, let me know what you would like us to place the spotlight on.

Stay alert, invest smart!

[Kukie @Karey_mwari]

@kayla_njoki @cmwenda93 For this we will hold everyone involved accountable because it’s highly unacceptable

[Kukie @Karey_mwari]

My brother @cmwenda93 walked into a hospital for a routine procedure and never walked out.
Conflicting medical reports, silence, evasiveness have marked our journey. The hospital failed in it's duty of care and accountability.
We want answers. We deserve the truth #JusticeforChris

[Kenya Revenue Authority @KRACorporate]

📢 𝐏𝐔𝐁𝐋𝐈𝐂 𝐍𝐎𝐓𝐈𝐂𝐄: 𝐊𝐑𝐀 𝐖𝐚𝐢𝐯𝐞𝐬 𝐏𝐞𝐧𝐚𝐥𝐭𝐢𝐞𝐬 & 𝐈𝐧𝐭𝐞𝐫𝐞𝐬𝐭 𝐨𝐧 𝐋𝐚𝐭𝐞 𝐅𝐢𝐥𝐢𝐧𝐠 𝐨𝐟 𝐑𝐞𝐭𝐮𝐫𝐧𝐬

We appreciate all taxpayers for the overwhelming turnout in filing 2024 income tax returns. Due to system issues on June 30, 2025, a waiver of penalties and interest has been granted.

✅ New deadline: 𝟓𝐭𝐡 𝐉𝐮𝐥𝐲 𝟐𝟎𝟐𝟓
📝 File your returns on https://t.co/JTKOcHDUnD and pay due taxes by the new date to avoid penalties

#KRAFilingSeason2025 #JiondoleeJam

[The Tax Lawyer® @wakili_dennis]

Housing levy, SHIF slash take-home pay to 55pc https://t.co/spDAtIbcZj

[Julians Amboko @AmbokoJH]

Treasury CS, John Mbadi, has published the Draft Income Tax Act (PAYE) Rules of 2024.

Musings:

· Notable change on administration where tax deducted is less then Kes 100/month. Currently, the employer is required to consolidate the amounts & remit when they exceed Kes 100.0 or by December each year. This provision is set for deletion implying that any amount will be payable by the 9th of the following month. Cashflow management by GOK?
· The definition of monthly personal relief now omits "relief claim form" & "any other amount for that month notified to the employer by the Commissioner" & replaces these phrases with "personal relief in accordance with the Act"
· The import here is that relief will no longer be an administrative function but a function of the law. Where are we going with this? My guess is that it relates to the MTRS pointer that there will be a rationalisation of reliefs. Finance Bill 2025?
· There's a clean up aligning the Commissioner's decision on disputed tax computation with the Tax Procedures Act 60 days communication window
· Also, now that the CS is revoking The Income Tax (PAYE) Rules of 1973, is it a signal that GOK is finally agreeing that the Income Tax Act, by & large, needs an overhaul 51 years later

[Julians Amboko @AmbokoJH]

KRA Commissioner General, Humphrey Wattanga, has published the Draft Income Tax (Allowability of Bad Debt) Guidelines 2024.

I think there's one change when compared to Legal Notice 37/2011.

There appears to be a new https://t.co/0AY78sUntV.5 providing that...

"For the purposes of these guidelines, a bad debt which is of a capital nature shall not be an allowable expense"

Financial services providers, are you safe?

[The Tax Lawyer® @wakili_dennis]

The Tax Laws (Amendment) Bill, 2024 is out. Let's find out the fine print.

[Julians Amboko @AmbokoJH]

I said yesterday that with the combined 7th & 8th Reviews disbursement having come short of target by some Kes 34.3 billion, we should see GOK revive the discussion around salvaging Finance Bill 2024 revenue raising measures (see quoted tweet).

Well, here we are with a:

1. Tax Laws (Amendment) Bill 2024
2. Tax Procedures (Amendment) Bill 2024
3. Public Finance (Amendment) Bills

Musings on 14 things I think we should all take note of:

1. First, unlike in the past we are now seeing the Treasury front loading an explainer to the public before the bills are tabled in Parliament. That looks like a lesson from the Finance Bill 2024 protests
2. It looks like GOK has now abandoned the earlier approach of piecemeal amendments to salvage Finance Bill 2024, we clearly now have an omnibus Bill
3. The proposal to amend the Income Tax Act & widen the definition of the Digital Market place to rope in food delivery, ride hailing, freelance work is coming back. Many will get caught here
4. The proposal to introduce Sec12G to the Income Tax Act providing for Minimum Top Up Tax is back. The rate is still at 15.0% as proposed in Finance Bill 2024. Multinationals do take note
5. The proposal to make SHIF contributions a deductible allowance is back. Also, contributions to a post-retirement medical cover to be deductible up yo Kes 15,000.
6. The bump up of pension contribution that is deemed deductible from Kes 24,000 to Kes 30,000 is back. However, the silence on switching the pension regime from exempt-exempt-tax to exempt-exempt-exempt seems to have gone, or did I miss it?
7. The VAT apportionment formula is revised as was proposed in Finance Bill 2024. The 90/10 ratio is going. Many will get caught
8. The 2023/24 Tax Amnesty Programme is being extended to June 2025. As I have said before, the issue here isn't about extending the amnesty, the issue is revising the base year that is being considered. Why not shift it to Dec 2023 from Dec 2022?
9. Railway Development Levy is going up from 1.5% to 2.5%
10. You recall that amendment to the Tax Procedures Act to make a KRA PIN mandatory for Kenyans working remotely outside the country? It's coming back friends
11. The explainer is eerily silent on eTIMS. Looks like the Finance Bill 3rd Reading proposal to introduce a Kes 1.0M annual turnover threshold has been done away with. Also, shouldn't we be talking about an amendment to Sec16(c) of the Income Tax Act on matters eTIMS?
12. That radical clean up of the 1st & 2nd Schedules of the VAT Act is indeed coming. We shall be seeing some serious changes on VAT exempt & VAT zero rating status
13. The introduction of Withholding Tax on goods supplied to public entities is back as proposed in Finance Bill 2024
14. The repeal of Digital Services in favour of Significant Economic Presence Tax is back. The explainer is however silent of where the deemed turnover will play. Is it 20.0% per initial Finance Bill 2024? Is it 10.0% per age post-3rd Reading Finance Bill?

Happy reading...Public participation on this post-Supreme Court Judgement on Finance Act 2023 (which is really a guide book on public participation) will make for an interesting exercise

[Timothy Thambu @TimothyMThambu]

On October 29, 2024, the Supreme Court of Kenya issued a final ruling that overturned the Court of Appeal’s decision declaring the Finance Act 2023 unconstitutional. Following the decision, we highlight some key provisions of Finance Act 2023 that will continue to remain in force

[The 4:14 Podcast @The4_14Pod]

The easiest way to know a government's policy, is to check what it is spending money on. ~ @IEAKwame

[Timothy Thambu @TimothyMThambu]

4️⃣ VAT on export services may change from zero-rated back to exempt.
5️⃣ Withholding tax remittance deadlines may revert to the 20th of each month, replacing the current 5-day rule.

[Timothy Thambu @TimothyMThambu]

The fate of the Finance Act 2023 will be decided by the Supreme Court today, Tuesday October 29, 2024 at 4pm.

The judgment could have significant implications, including:

1️⃣ The standard 16% VAT on petroleum products may revert to 8%.

[Timothy Thambu @TimothyMThambu]

2️⃣ The requirement for businesses to issue eTIMS invoices and use them for deductible expenses could be eliminated.
3️⃣ The new top tax rates of 32.5% for income between KES 500,000–800,000 per month and 35% for income over KES 800,000 may be removed.

[Timothy Thambu @TimothyMThambu]

Seeing everyone’s enthusiasm and curiosity was inspiring, and it reminds me why I’m passionate about what I do – helping people unlock their potential through knowledge. 💼📊 #TaxTraining #CreativesInBusiness #Entrepreneurs #TaxLaw #KenyaTax #LegalEducation #ProfessionalGrowth

[Timothy Thambu @TimothyMThambu]

🌟 Empowering Minds, Inspiring Growth! 🌟
Reflecting on a fantastic day spent with an incredible group of creatives and entrepreneurs at a recent tax training session! 🎉It was a privilege to dive deep into taxation in Kenya and explore the issues shaping our tax landscape.

[Timothy Thambu @TimothyMThambu]

From lively discussions on compliance and best practices to practical tips for navigating tax obligations with confidence, this session was all about equipping these brilliant minds with the tools they need to grow their ventures and make informed decisions.

[Julians Amboko @AmbokoJH]

MAJOR development - The government has announced that starting Dec 25th, 2024 ALL pay bills will be deemed to be virtual electronic tax receipt systems in a bid to widen the tax base.

Senior Economic Advisor, Moses Kuria, says this decision has been arrived at at the disparity between KRA registered ETRs & >2.0M digital payment touch points across the country. He says KRA is aligned.

Musings:

· What does this mean for Sec23 of the Tax Procedures Act & Sec16c of the Income Tax Act?
· I presume it means, by extension, that evidence of mobile money payments will also be deemed as good as an eTIMS receipt & therefore be admissible for income tax deductible purposes
· Go to the MTRS & read about integration of tax systems with 3rd party systems
· See the quoted tweet here. There's a lot more in the pipeline

[The Tax Lawyer® @wakili_dennis]

KRA SUMMIT 2024 HIGHLIGHTS:
CS John Mbadi:
1. The Government is considering the reduction of corporation tax rate from 30% to 25% and VAT from 16% to 14% as per the Medium Term Revenue Strategy.
2. iTax is outdated, it needs a revamp / overhaul.
3. ICMS system is not working as expected. There is revenue leakage that should be fixed.
4. KRA budget for staff welfare to be increased.
5. KRA developing a system to ensure visibility of taxpayers such as professionals and landlords.

PCS Musalia Mudavadi:
1. Government has requested the assistance of IMF to undertake a Governance and Corruption Diagnostic in all government agencies and departments.

[The 4:14 Podcast @The4_14Pod]

Our second to last episode on The IMF in Kenya from 2021 to date is up! Catch more of this discussion on your favorite podcast app.