Vision Movers Consultancy

THE HEALTH LAWS:
WHAT IS WHAT?

The National Health Insurance Fund ( NHIF ) was established in 1966 to provide affordable, accessible and sustainable medical cover for all Kenyans.
This year, Parliament amended it to be Social Health Insurance Fund ( SHIF ) Act, 2023.
It is under this Act that two Funds have been established:
(1) Primary Health Fund ( PHF ), and
(2) Social Health Insurance Fund ( SHIF ).
Primary Health Fund will cater for Chronic, Emergency and Critical illness while Social Health Insurance Fund will provide affordable, accessible and sustainable medical cover to all Kenyans as it were with NHIF.
PAYMENTS:
Kenyans in the formal employment will pay 2.5% from their gross pay while unemployed Kenyans aged 25 years and above will pay Ksh 300.00 per month.
Payment for those in the informal sector hasn't been worked out yet.

Another enacted law known as Digital Health Care Act has generated heated arguments over its constitutionality which issue has been taken to court for an application to be declared unconstitutional and therefore unimplementable.
The matter is pending before court for determination.
This is a case where infants are to be injected with a nanotechnology substance to give all children born in Kenya after 19th October, 2023 a digital ID and which petitioners argue that it contravenes the Registration of Persons Act where one is Identified at will but not without his or her own consent.
They argue that the privacy of the infants right up to their adult lives will be compromised and it will come with other issues as well.

As expected National Social Security Fund (NSSF Kenya) has issued an NOTICE to all Employers on the 2nd year implementation of Tier 1 and Tier 2 contributions.

Here, the Lower Limit rises to Kes. 7,000 while the Upper Limit doubles to Kes. 36,000. Which means any Employee earning Kes. 36,000 will be deducted 6% of their gross pay as Total NSSF contributions which the Employers must match.

An employee earning any amount above Kes. 36,000 will see a deduction of Kes. 2,160 on their payslip as an NSSF contribution which the Employers must match as well.

Vision Movers Consultancy is ready to assist you with a payroll professional services. Contact us on 0780655334

Are you a small, medium sized or start up company and don't have a full time accountant?

We got you sorted!!

Get the following Accountancy services at very affordable rates.

1.Book keeping
2.Filing statutory returns;including Payee, NHIF, VAT, Witholding tax, quartery income tax etc
3.Debtors management
4.Vat reconciliation
5.Accounts receivables
6.Accounts Payable
7.Tourism levy return filing
8.Banking procedures
9.Invoicing process
9.Payroll processes
10.Petty Cash handling
11.Stock management
12.Costing analysis

Reach out to us to 0780655334 or [email protected]

Kenya's Finance Bill 2023 highlights

1. Bitcoin and non-fungible tokens (NFTs) to be defined as digital assets hence, subject to tax. Sale of bitcoin and NFTs subject to tax at 3%

2. State employees will now pay tax on per diem.

3. All the paid partnerships on Instagram and brand ambassador roles to be taxed.

4. Marketing services to be subject to 5% withholding tax. Digital content monetisation is now subject to 15% withholding tax.

5. If you earn more than Ksh. 500k per month, your marginal Pay as you Earn (PAYE) tax rate has increased from 30% to 35%.

6. Liquefied petroleum gas (LPG) and fertilizer inputs to be VAT exempt.

7. Exported services to be VAT exempt from being subject to 16% VAT.

8. If a taxpayer disputes a tax assessment by the KRA and appeals to the Tax Appeals Tribunal, he will be required to deposit 25% of the disputed tax or its security equivalent.

9. Wigs, human hair, false beards, eyebrows and eyelashes to be be subjected to 5% excise duty.

10. Imported mobile phones to be subjected to 10% excise duty.

11. Print, TV, billboard and radio adverts to be charged a 15% excise duty if they are related to alcohol or betting.

12.Bill proposes amendment to the Employment Act to provide for deduction of 3.0% of employee's basic salary (matched by another 3.0% from the employer) towards the National Housing Development Fund. Amount capped at Kes 5,000

Are you a small, medium sized or start up company and don't have a full time accountant?

We got you sorted!!

Get the following Accountancy services at very affordable rates.

1.Book keeping
2.Filing statutory returns
including Payee, NHIF,VAT, Witholding tax, income tax
3.Debtors management
4.Vat reconciliation
5.Accounts receivables
6.Accounts Payable
7.Tourism levy return filing
8.Banking procedures
9.Invoicing process
9.Payroll processes
10.Petty Cash handling
11.Stock management
12.Costing analysis

Reach out to us to 0780655334 or [email protected]

Tax Update

Non-residents (for tax purposes) pay Withholding tax at 30% on gross rent received as a final tax.

Basic Understanding of The Financial statements.

Each company has 3 financial statements that answer 3 different questions:

1. Income Statement (Are you profitable?)

2. Balance Sheet (Are you healthy?)

3. Statement of Cash Flows (Where is cash going?)

Expenses can be further broken down into three categories:

Direct Cost (cost related to production/manufacturing)

Cost of Goods Sold or COGS (cost related to revenue)

Overhead expenses (cost required to run the business, but not directly related to revenue)

The income statement helps you:

• Identify how much revenue you’re bringing in

• Understand if you’re making money on your product

• Identify if your fixed or overhead costs are too high

• Itemize your costs to make better decisions

2. Balance Sheet

This statement tells you a company’s financial strength at a specific snapshot in time.

The Formula: Assets = Liabilities + Equity
Assets are what you own:
• Cash
• Accounts Receivable (money owed to you)
• Inventory (product in your possession but not sold)
• Fixed Assets (property, equipment, machinery, or vehicles)
• Intangible Assets (software, licenses, trademarks, or goodwill)

Liabilities are what you owe:
Equity is how much the company is worth on paper:

• Money put in the business

• Money taken out of the business

• Earnings retained in the company

From the balance sheet you learn:

• How strong the business is financially

• Whether short-term obligations can be met

• The amount of debt a company has

• The book value of the company

3. Statement of Cash Flows

This statement helps you understand how cash has been spent over a period of time.

The formula: Net Increase/Decrease of cash during period + Cash at beginning of period = Cash at end of period

The net increase/decrease is broken down into 3 categories:

• Operating Activities (cash collected from sales versus cash paid related to sales)

• Investing Activities (new equipment purchased or sold)

• Financing Activities (change in debt or inflow of capital)

When analyzing this statement, you are:

• is your cash flow positive or negative?

• why your cash flow is positive or negative

• whether operations is carrying its weight

• what investments or financing is costing

A quick reminder to interested new clients we offer statutories returns services starting from NSSF, NHIF,Witholding tax,PAYE, Turnover taxes, Monthly Rental Returns etc

See example below for NSSF

Tax Facts vs Myths

TAX OFFENCES VS THE PENALTIES

What Penalties are Charged on Tax Offences in KENYA?

Tax offences can attract punitive penalties and interest.
These include:
Offence - Late filing of Pay-as-you-earn (PAYE)
Penalty - 25% of the tax due or Kshs. 10,000, whichever is higher.

Offence - Late payment of PAYE tax
Penalty - 5% of the tax due and an interest of 1% per month

Offence - Failure to deduct Withholding VAT and Withholding Rental Income Tax
Penalty - 10% of the amount of the tax involved

Offence - Late payment of Withholding Tax (Withholding Income Tax, Withholding VAT, Withholding Rental Income Tax)
Penalty - 5% of the tax due

Offence - Late filing of MRI Returns
Penalty - 5% of the tax due or Kshs. 2,000 whichever is higher for Individuals or 5% of the tax due or Kshs. 20,000 whichever is higher for Non-Individuals

Offence - Late payment of MRI
Penalty - 5% of the tax due and an interest of 1% per month

Offence - Late payment of Stamp Duty.
Penalty - 5% of the duty payable

Offence - Late filing of the Excise Duty return
Penalty - 5% of the tax due or Kshs. 10,000, whichever is higher

Offence - Late payment of Excise Duty Tax
Penalty - 5% of the tax due and an interest of 1% per month

Offence - Late filing of the VAT Return
Penalty - 5% of the tax due or Kshs. 10,000 whichever is higher

Offence - Late payment of the VAT tax
Penalty - 5% of the tax due and an interest of 1% per month

Offence - Late filing of Income tax company or partnership returns
Penalty - 5% of the tax due or Kshs. 20,000 whichever is higher

Offence - Late payment of Income tax for Non-Individuals
Penalty - 5% of the tax due and an interest of 1% per month

Offence - KRA PIN-related offences.
Penalty - Ksh. 2,000 per offence.