The Finance Act, 2020

The Finance Act, 2020 (the Finance Act) was assented to by President Uhuru Kenyatta on 30 June 2020 to make amendments to a raft of laws in Kenya, including the Income Tax Act (CAP 470), the Value Added Tax Act, 2013, the Tax Procedures Act, 2015, the Miscellaneous Fees and Levies Act, 2016 and the Excise Duty Act, 2015 among other miscellaneous amendments. Most of the amendments relating to income tax have an effective date of 1 January 2021 while other amendments will be effective on 1 July 2021. The rest of the amendments came into force on the date of assent on 30 June 2020.

As previously advised in our Legal Alert on the Finance Bill, 2020, the amendments in the Finance Act can be seen to target an increased tax base with the introduction of minimum tax and the digital service tax as well as disallowing certain categories of expenses in the computation of taxable income. We also note that a vast number of changes which were earlier proposed by the Tax