Ahead of the hearing of the case regarding the tax on transactions on 500,000/- and above, beginning this July, the business community in Kenya is looking to the courts for a refrain on the implementation of the tax.
The tax was part of the highlights of the 2018 budget presented by Finance Cabinet Secretary Henry Rotich where the Treasury recommended the implementation of the tax. Majority of the business community in Kenya will fill the pinch with many expected to extend the tax to their clients.
Dubbed the Robin Hood Tax, Rotich, in his speech proposed a 0.05% tax of any amount of 500,000 shillings or more transferred through banks or other financial institutions. This was part of the government’s shot at achieving its budget deficit that stood at 5.7% of the Gross Domestic Product GDP in this financial year.
But what does this mean to the stakeholders in the business world? A case in point is leading property company Optiven Group which has a number of its projects priced at between 500,000/- and above. George Wachiuri, the man at the helm of the company says “there is a need to consider the outcomes of some of these taxes seeing that many financial institutions are still reeling from the effects of the rate cap.”
According to Wachiuri, there is a need to engage various stakeholders in order to consider underlying outcomes to the new taxation regime. His remarks come as investors in any area and banks in particular will need to part with a 0.05% tax on all transactions amounting to Ksh500, 000 and above beginning this July 2018.
The CS has proposed the introduction of the Robin Hood tax of 0.05 percent of any amount of 500,000 shillings or more transferred through banks or other financial institutions. An appeal by the Kenya Bankers Association (KBA), on the tax is set to be heard on Monday the 16th of July 2018.