FINANCE
Key Highlights Of The 2022 Finance Bill
By CPA Peter Kinuthia
The Kenyan National budget statement for fiscal year 2022 / 2023 was presented to the National Assembly on 7th April 2022 . Subsequently , the Bill was tabled for the first reading on 12 April 2022 . Once debated and approved by the National Parliament and assented by the President , it will become Finance Act , 2022 .
A Finance Act provides the legal framework and measures that the National Treasury has put in place to mobilize funds through several avenues including collecting taxes to finance the Government expenditures for the following year of income , in this instance , 2022 / 23 fiscal year .
The proposals in the Finance Bill are meant to amend various tax laws including : the Income Tax Act , The VAT Act , 2013 , Excise Duty Act , Tax Procedures Act , 2015 , and the Miscellaneous Fees and Levies Act . It also makes various amendments to other miscellaneous amendments to the Insurance Act , Capital Markets Authority Act and Retirement Benefits Act .
Below is a sample highlight of key amendments of the Finance Bill 2022 .
Tax Appeals Tribunal
Appeal to the High Court - w . e . f 1 January 2023
The Bill proposes to introduce a requirement for taxpayers to deposit
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A Finance Act provides the legal framework and measures that the National Treasury has put in place to mobilize funds through several avenues including collecting taxes to finance the Government expenditures for the following year of income . with the Commissioner 50 % of the tax in dispute in a special account at the Central Bank of Kenya before they file an appeal to the High Court against a decision of the Tax Appeals Tribunal ( TAT ).
The requirement to pay 50 % of the dispute tax does not apply where the Commissioner is the one appealing to the High Court .
Upon full exhaustion of the appeals process and the Court has ruled in favor of the taxpayer , the Commissioner will be required to refund the monies deposited within 30 days after the determination of the Court .
This amendment assumes that the Kenya Revenue Authority is right , and taxpayers are guilty . The proposal if accepted , will impede a taxpayers access to justice where one cannot afford to fulfil such a condition . It will also be harmful to the financial health of the taxpayer ’ s business where one pays and the amount will be tied up for an unknown period of time as tax cases take long time to be resolved .
Widening of the security for unpaid tax on taxpayers property w . e . f 1 January 2023
There is a proposal to widen the scope of property to secure unpaid taxes to include : land or building , aircraft , ship , motor vehicle , or any other property which the Commissioner may deem sufficient to serve as security for unpaid taxes .
The Commissioner is to be empowered to direct in writing to the Land Registrar , the Registrar of Ships , Director General of the National Transport and Safety Authority ( NTSA ) and any other person who the Commissioner is satisfied has authority to hold Property ( collectively referred to as “ Registrars ”) to register securities over properties owned by taxpayers as security for the unpaid tax .
The Commissioner will be required to inform the taxpayer of their direction to the registrar within 7 days of the notification .
Further , it is proposed to empower the Commissioner or an authorized officer to recover unpaid tax by disposing the property subject to the security if the taxpayer does not pay the unpaid tax within two months of notification .
The disposal to recover the unpaid tax would be either by public auction or private treaty . The taxpayer shall be required to bear costs associated with the Commissioner ’ s recovery efforts .
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