Trade associations to pay corporate taxes in proposal
Thursday May 04 2023
Business lobbies will for the first time be required to pay income tax under proposed changes to the law that seek to change the definition of entities that are liable to pay their pound of flesh.
The Finance Bill, 2023 says that trade associations will now be classified as businesses making them liable to pay the 30 percent corporate income tax as the Kenya Revenue Authority targets business lobbies.
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Kenya has over the years recorded an increase in the number of registered trade lobbies keen to defend and push for the interest of members mainly regarding taxation and policy.
Some of the notable trade lobbies targeted under the proposed changes include the Kenya Association of Manufacturers (KAM), the Kenya Bankers Association (KBA), the Kenya National Chamber of Commerce (KNCC), the Federation of Kenyan Employers and the Kenya Motor Industry Association.
“A body of persons, which carries on the activities of a members’ club or trade association shall be deemed to be carrying on a business and the gross receipts on revenue account (excluding joining fees, welfare contributions and subscriptions) shall be deemed to be income from a business,’’ reads the Bill.
The Bill will be tabled in Parliament for debate and adoption ahead of the new financial year starting in July.
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Some of the lobbies such as KAM and KBA have over the years risen to prominence and have been key to shaping government policy on a raft of issues.
Besides pushing for the interest of their members locally, the lobbies have also been instrumental in opening up trading opportunities abroad, highlighting their growing significance to the economy.