Treasury proposes higher taxes for top earners

Written By: Nicholas Nduati
346

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Kenyans earning higher incomes are set to pay more taxes if the draft income tax bill 2018 comes into force in its current form.

This is after the national treasury has proposed the introduction of another tax band at the rate of 35 percent for those whose gross income is above 750,000 shillings per month.

Those earning lower salaries are for the third year in a row set to enjoy higher personal relief.

The national treasury has proposed to increase capital gains tax from the current five percent to 20 percent.

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According to the draft income tax bill 2018 that has increased the minimum tax band from the current up to Ksh 134,164 annually to KSh147,580.

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The national treasury has proposed to add another tax band targeted at high income earners drawing over 750,000 shillings monthly.

It is however a blow for persons wishing to sell property with the capital gains tax which is charged on the net gains made from property by the transferor or seller set to be increased to twenty per cent from the current five percent.

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At the same time it’s also a blow for PSV and cargo transporters with the rate of advance tax for vans, pick-ups, trucks, prime movers, trailers and Lorries set to increase to Kshs 1500 per ton of load capacity subject to a minimum of Kshs 2400 per year of income.

For PSVs, the advance tax rate for saloons, station-wagons, mini-buses, buses and coaches will be Kshs 60 per passenger capacity per month subject to a minimum of Kshs 2400 per year of income.

Moreover, the bill is proposing that a residential rental income tax shall be payable by any resident person from income received for the use or occupation of residential property.

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The tax however shall apply to income in excess of the lowest tax band but does not exceed ten million shillings during any year of income.

With regards to individual tax relief, the amount of a resident individual tax relief shall be, in the case of personal relief of Kshs 16,896 per annum. And an insurance relief of 15 percent of the amount of premiums paid but shall not exceed Kshs 60,000 per annum.

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