5 New Rules In The Finance Act That Could Affect Your Biz

You feel like the new penalties are a waste of your effort and the money you make. The rules are really hard to understand, so we've put in the work to break them down for you.

The Finance Bill introduces some new tax measures and changes to some existing ones that may affect you as a small business owner.

Read how to comply with the new Finance Bill in Kenya and keep penalties out of your business life in 2024.

Turnover tax ni ya wasee wako in biz whose sales ni over Ksh. 1 million but Under Ksh. 25M.

Yani kama unauza vitu za more than 80k a month. The Finance Bill 2023 ime-increase the tax rate from 1% to 3%.

This means kama sales za biz yako ziko kwa hii category ya 1M -25M per year, you will have to pay 3% of your sales as turnover tax to the Kenya Revenue Authority (KRA).

Najua being a content creator has been on the rise and trending in the recent past. Gava pia imekua ikiwatch and is very serious ku-make sure content creators pia wanalipa taxes.

For Kenyan content creators, before walipwe, lazima 5% of their income ikuwe withheld either by the companies giving them work ama by the platforms that pay kama YouTube.

This 5% then has to be remitted to the KRA.

Digital service tax is a new tax ililetwa na Finance Bill 2023, ndio income from services through a digital marketplace pia ikatwe taxes.

A digital marketplace ni any platform that enables the direct interaction between buyers and sellers of goods and services yani kama social media.

So if unarun errands tao and you get your customers from facebook, hii tax ni ya wasee kama wewe. Other examples of digital services include online advertising, online shops kama za IG, Kustream, online gaming, and digital content creation.

The digital service tax rate is 3% of the amount you charge a customer. So kama unacharge wasee kufanya errands in the CBD 500/ according to this tax rule, unaneed kulipa gava . 15 bob.

Finance Bill ya 2023 ilinasa wasee wa online sana, starting 1st September 2023.

In this new rule, anyone mwenye ako kwa biz ya online assets - kama Crypto currencies, ama NFTs lazima atalipa a 3% of the transfer or exchange of the digital asset as tax to KRA. The bill ina-require that this must be paid 5 days after the transaction ime-happen.

Even though hii sio a tax you will need to pay, ni kitu important for Meshers who are beauticians, salon owners, freelance makeup artists and hairstylists.

Now that kuna a 5% increase in the taxes charged on products hua wanatumia, it’s time you adjust your prices. Start factoring in the extra 5% kwa vile unalipisha customer across your services ndio mwishowe usiumie.

Ku-comply for watu wa biz, watu wa digital services, you will need to register for turnover tax on the KRA online portal** and file monthly returns and pay the tax by the 20th day of the following month.

Ni very important ku-keep proper records za your sales and expenses and issue electronic receipts. If you fail to comply with these requirements, unaeza face penalties and interest charges from the KRA.

Prices are already going up, and more taxes mean even less profits. Don't be shy to try and build the new taxes into your prices.

As a small business owner, you need to be aware of the new tax measures and changes and how they may impact your business operations and profitability. Kama due to the increase in fuel VAT from 8% to 16% you may need to increase your delivery fees from 100/= in the CBD to 120/=

It’s important to stay on top of vitu zimepassiwa in 2023 ndio biz yako ithrive as it should. Stay tuned hapa MESH as we continue to learn how the Finance Bill 2023 will affect your everyday life, your business and even the future