Electricity tax rebates for manufacturers to be backdated

Written By: O'brien Kimani
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All manufacturers will qualify for a 20 percent tax cut on their electricity bill
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Electricity tax rebates for manufacturers would be backdated to June this year following the amendment to the Income Tax Act.

All manufacturers will qualify for a 20 percent tax cut on their electricity bill in the 12 months period to June next year.

However, starting July 2020 manufacturers will have to meet a criteria set by the government to continue enjoying the tax cuts.

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The tax rebate is expected to stimulate the manufacturing sector to create more jobs and expand the base.

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The manufacturers will see a 20 percent tax reduction from their power bills, which they will claim while filing their tax returns with the Kenya Revenue Authority.

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Manufacturers have welcomed the rebate saying it will help increase production and competition.

However, from July next year, companies will only qualify for the rebates once they meet tough conditions set by the government such as increasing energy consumption and capital investment by 10 percent or boosting their sales revenue by 10 percent.

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The proposal was first announced in the Finance Bill 2019, allowing industries to deduct 30 per cent of their electricity expenses from their taxable income.

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