ANNOUNCEMENT 23 Jun 2017
On 23 June 2017, the Finance Act 2017 was published in the Kenya Gazette. The Act introduced several amendments that are relevant to the GTA scope.
NUMBER OF INTERVENTIONS
Kenya Gazette. 2017. Finance Act 2017. http://kenyalaw.org/kl/fileadmin/pdfdownloads/Acts/FinanceAct_No.15of2017.pdf
Effective from 1 January 2018, the government of Kenya via Finance Act 2017 introduced a corporate tax reduction of 15% for newly incorporated companies carrying out local assembly of motor vehicles.
The reduced rate will initially be valid for a five-year period. Nevertheless, according to the Finance Act 2017, the tax reduction of 15% can be extended for an additional five-year period.
The additional 5-year extension will only apply if the companies carrying out the local assembly of motor vehicles achieve a local content of 50% of the ex-factory value of their vehicles.
Furthermore, as of 1 January 2018, the government of Kenya via Finance Act 2017, also for the first time exempted from Import Declaration Fees as well as Railway Development Levies, all goods which are imported for the purpose of being used in the construction of local LPG storage facilities.
As of 1 January 2018, Finance Act 2017 introduced several amendments which are relevant to the GTA scope and are established with the purpose of boosting the rate of investment in the Special Economic Zones (SEZ) of Kenya. These highlighted amendments are:
As of 1 January 2018, the government of Kenya via Finance Act 2017, for the first time required for all persons with an insurable interest in the marine cargo sector, to acquire marine insurance exclusively with local insurers registered in the Kenyan jurisdiction. Previously, persons with an insurable interest in the marine cargo sector were allowed to place marine insurance with insurance firms located outside of Kenya. The core scope of this amendment is to promote the local insurance sector of Kenya.
Effective from 3 April 2017, the government of Kenya under Finance Act 2017, introduced amendments to the VAT Act that are specifically relevant to the GTA scope.
Specifically, motor vehicles that are assembled locally and are exclusively used for the transportation of tourists, are as per Finance Act 2017, for the first time exempted from Value Added Tax-related obligations. Nevertheless, in order to benefit from the highlighted VAT relief the locally assembled vehicles must meet the following conditions :
Lastly, effective from 3 April 2017, the government of Kenya via the Finance Act 2017, for the first time exempted from excise duty goods that are imported and are exclusively designated for the use of the manufacture of locally produced sanitary towels.