Withholding Tax: Gov’t set to Tax farmers selling produce to cooperatives.
Withholding tax: Gov’t set to Tax farmers selling produce to cooperatives: In a the 2024 Budget policy as presented by the Treasury, it was revealed that this move is aimed at helping the government raise revenue to fund to sustain its bottom up economic agenda.
The treasury termed the agricultural sector as Hard to Tax Sector but promised to develop a framework to raise revenue from the area.
The statement read,”The Treasury will) Review and explore means on suitable taxation of the agriculture sector, such as introducing withholding tax on payments for produce delivered to cooperatives or other organized groups,”
Kenya Revenue Authority defines withholding tax is a method of tax collection whereby a payer of certain incomes deducts tax upon payment of certain income to Payees.
The payer then remits the tax so deducted to the Commissioner of Domestic Taxes Department within 5 working days after the deduction is made.
Notably, the policy statement has proposed a review and exploration of means of suitable taxation of the informal sector as well as the digital sector.
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