You may soon be paying extra for some commodities if the Proposed Finance Bill 2023 comes into effect. Employees’ and employers’ salaries will also be affected, parting with more monthly.
At the American Chamber of Commerce Business Summit in March, President William Ruto made a speech regarding tax in Kenya. Much of what he said is expected to be part and parcel of the 2023 tax reforms.
Which Products will be Affected?
Beauty Products
Are you a lady or in the cosmetics industry? The Finance Bill 2023 proposes a 5% excise duty for artificial nails, eyebrows, wigs, human hair, false beards, and eyelashes.
Ads
There will also be a 15% excise duty for advertisements on radio stations, price competitions, television, betting, gaming, lotteries, and billboards related to alcoholic beverages.
Cell Phones
You will pay more for imported phones with an excise duty of 10%. Additionally, imported varnishes, lacquers, and paints will rise to 15%. The Test liner and fluting medium will both have an excise duty of 25%.
Fish
Imported fish will be charged Ksh 100,000 per metric tonne or 20% depending on which amount is higher. This means as a food commodity, fish prices in Kenya will shoot up.
Powdered Juice and Sugar
After a meal, a drink is essential, imperative hence perhaps why powdered juice has not been left behind which will be charged Ksh 25 per Kilogram. Locally purchased sugar by a recognized pharmaceutical manufacturer will receive an excise duty of Ksh 5 per Kilogram.
Furniture & Cement
The construction fraternity has not been forgotten with imported cement being given an excise duty of 10% of the value or Ksh 1.50 per Kg depending on the higher amount. Imported furniture excluding furniture from East African Community Partner States that adhere to the East African Community Rules of Origin will embody a 30% excise duty.
Who Will be Affected?
The Proposed Finance Bill 2023 will highlight the 2007 Employment Act which requires employers to contribute to the National Housing Development Fund for every employee. If the Bill passes, employers will pay 3% of their employee’s monthly basic salary to the fund. Employees will also be required to pay a similar percentage of the basic salary.
Photo: Courtesy
If you are earning above Ksh. 500,000 per month, the Treasury proposes a 35% PAYE tax on your salary. This means you will have to part with Ksh. 175,000 every month with NSSF, NHIF, and other deductions not included.
Influencers have also been included, with the bill seeking to tax digital content monetization. Content creators will, hereby, incur a 15% tax for promoting, and advertising products and services online. This is, however, not limited to merchandise sales, sponsorships, paid subscriptions, and affiliate marketing.
Conclusion
The government aims to attract business investors while improving the economic environment. Struggling with foreign debt, unpaid civil servants, and late money disbursement to counties, the tax proposals are most likely to be included in the 2023 Finance Bill.
Which products will affect you directly? We encourage you to participate in the Finance Bill 2023 process that will influence the next government fiscal year that starts on 1st July 2023.
