- KRA plans to remove the Ksh 5 million annual turnover threshold for VAT registration, requiring all businesses, including small-scale traders, to register for and charge 16% VAT.
- The move aims to address a 38% VAT collection gap and increase revenue from Ksh 653 billion to over Ksh 1 trillion.
- The policy will affect traders of everyday goods and service providers, likely leading to price increases as businesses pass the tax burden to consumers.
- There are concerns that increased compliance and taxation could stifle business growth and force some enterprises to close.
- The proposal contradicts recent Finance Bills, which suggested raising the VAT threshold to Ksh 8 million to ease compliance for small businesses.
Source: kenyans.co.ke
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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