List of Proposed VAT Changes in Finance Bill 2024.
List of Proposed VAT Changes in Finance Bill 2024: In the Changes, Prices of essential consumer goods, bread, betting stakes, and credit cards will significantly adjust
The National Treasury has proposed a16 per cent VAT on Bread, which means a 400g loaf of bread could see a price hike of at least Ksh10, raising the average cost from approximately Ksh65 to around Ksh75.
The Finance Bill 2024 proposes eliminating VAT exemptions for several financial services, including issuing credit and debit cards, telegraphic money transfer services, and cheque handling, processing, clearing, and settlement including special clearance or cancellation of cheques;
Others are ssuance of securities for money, including bills of exchange, promissory notes, money, and postal orders; the assignment of debt for consideration, financial services on behalf of another on a commission basis.
Another proposal under the Finance Bill 2024 is the inclusion of electronic tax invoices. This amendment seeks to align VAT provisions with existing tax laws. If implemented, businesses would be required to issue electronic tax invoices for transactions, effective from July 1, 2024.
The Finance Bill proposes raising the mandatory VAT registration threshold from KES 5,000,000 to KES 8,000,000.
The bill suggests limiting VAT exemptions on insurance and reinsurance services to premiums only.
Other Proposed amendments include the removal of VAT exemptions aimed at boosting the tourism sector.
The Finance Bill 2024 proposes removing the VAT exemption for betting, gaming, and lotteries services, subjecting them to VAT at the standard rate of 16 per cent.
The Finance Bill proposes subjecting the supply of locally assembled or manufactured mobile phones to the standard VAT rate.
The Bill suggests removing the zero-rated status for certain goods in the e-mobility sector, subjecting them to the standard VAT rate of 16 per cent. This proposal affects items such as electric bicycles, solar and lithium-ion batteries, and electric buses.
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