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VAT Bill 2013 - Solutions ONLY
Rank: Veteran Joined: 12/23/2010 Posts: 1,229
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murchr wrote:itz wrote:am surprised no one has mentioned reducing size of Govt.The new bloated govt is part of the reason for your VAT woes.it is also a fallacy to assume farmers and gikomba people don't pay some form of taxes.For farmers please sit down and calculate what goes into the cost of production up to sales n marketing and there in you might find your answer.For Gikomba people that business is on its death bed because of heavy taxation of mtumba at port of entry.
Kenya is over taxed and the solution among many others that have been mentioned here is to reduce size of govt and lower tax rate plus widen the base. Who will risk being called an enemy to devilution? Anyway, i understand ile chai ya saa nne na kumi has been struck off from the exchequer. I wonder how much they were spending on that. I would wish to see a drastic drop of seminars being held in hotels here and there, these people should utilize technology and the conference rooms in offices. Develop a mechanism to collect fines from traffic offenders and this includes pedestrian crossing in undesignated areas. Give incentives/loans to existing companies to hire the otherwise idle Kenyans who are potential taxpayers The minimum wage regulations make it hard for business entities to absorb more staff.
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Rank: Elder Joined: 3/18/2011 Posts: 12,069 Location: Kianjokoma
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MuchNo wrote:This is not my idea, but something I heard while discussing the matter earlier today. I thought it had merit, so when I saw this thread I thought I'd mention it.
Why not impose a one-time mandatory tax on properties. Yani, everyone who is a registered owner of a property has a 0.5% one-time tax imposed on their property. The value used should be the same as that used to determine rates. Hence a property valued at KES 10 million will result in a KES 50,000.00 tax on the property owner.
This could net hundreds of billions if not over a trillion Kenya Shillings for The Treasury, and would obviate the need to increase VAT -- in fact, it would result in a welcome reverse of that order. It would provide the government with funding for a few years (assuming not all budget expenditure must be met from this source), and would solve so many other issues.
Like I said, not my idea but I thought it was a good one. Your thoughts? We already have this. Land Rates collected by councils and now county govts.payable annually. On purchase, govt takes 4pc of value as stamp duty na haitosheki
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Rank: Elder Joined: 3/18/2011 Posts: 12,069 Location: Kianjokoma
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stamp duty on land purchase is 2pc of land value. If valued at 2m u pay 40k before transfer is effected
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Rank: Elder Joined: 3/18/2011 Posts: 12,069 Location: Kianjokoma
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@mkeiyd, hata nyinyi mlipe ushuru. Which taxes do you pay currently? VAT and import taxes on goods? What about income tax which the rest of us pay? BTW, the average monthly earning of a tertiary-level educated employee is way below the amounts earned in informal sector
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Rank: Member Joined: 11/21/2006 Posts: 608 Location: Ruiru
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Lolest! wrote:stamp duty on land purchase is 2pc of land value. If valued at 2m u pay 40k before transfer is effected Transfers are divided into two categories => Urban Land – land in the municipalities -stamp duty =4% => Agricultural land [Outside the Municipality]. – stamp duty =2% "..I am because we are. "― Ubuntu, Umtu,
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Rank: Elder Joined: 3/18/2011 Posts: 12,069 Location: Kianjokoma
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GGK wrote:Lolest! wrote:stamp duty on land purchase is 2pc of land value. If valued at 2m u pay 40k before transfer is effected Transfers are divided into two categories => Urban Land – land in the municipalities -stamp duty =4% => Agricultural land [Outside the Municipality]. – stamp duty =2% correct!
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Rank: Member Joined: 8/29/2008 Posts: 571
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LoLEST.....with VAT on everything,we are going to evade income tax even more....you need to join US in jua kali..and get Your freedom.Freedom from KRA..
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Rank: Member Joined: 11/21/2006 Posts: 608 Location: Ruiru
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Saw this which am quoting verbertim as the author requested...... The VAT Act, 2013: As a TAX Law practitioner, I must tell the complaining middle class and pretenders to middle class that the VAT Act, 2013 is the most fair piece of legislation in tax and fiscal policy in the whole of East Africa. Exempting and zero rating products which are processed and used by the middle class/wage earners means that the very poor subsidize their lifestyle because the input VAT which is claimed back and paid to manufacturers and traders of these commodities is paid by all Kenyans irrespective of whether they bought or consumed those products. If you have ZERO knowledge on how the INPUT-OUTPUT system works in VAT and other Consumption and Trade Taxes is is goo to read the law, the rationale for its enactment or to just shut up. 70% of the citizens in Kenya live in rural areas and do not buy processed goods and food; why should they bear the tax burden of subsidizing the lifestyle of the middle class and wage earners, why??? 400 products were exempted before the new law, now only 40 are exempted. Have you even bothered to know what is exempted before complaining? The ignorance being displayed by idiotic media persons who are supposed to be "learned" or is it "educated"? is really shocking. VAT exemption and zero-rating allows traders who manufacture and/or sell goods subject to this tax to claim back their inputs.......and this has given rise to many fraudsters in the economy who "manufacture" and "sell" such goods and claim back the inputs from taxpayers.......think people, read, even Wikipedia and understand VAT before acting like people who never saw a classroom. In developed and emerging economies there is no exemption or zero-rating....read the VAT law in BRICS country....subsidizing the life of the middle class/wage earners is the very ant-thesis of economic growth. Enough said, quote me. "..I am because we are. "― Ubuntu, Umtu,
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Rank: Elder Joined: 3/18/2011 Posts: 12,069 Location: Kianjokoma
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@GGK, I like that guy's argument though for exempt items one does not claim input tax. You claim for zero rated items.
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Rank: Member Joined: 4/3/2008 Posts: 48
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Chaka wrote:@MuchNo,
What if the property owner is retired and staying in his/her property with pension as the only source of income? They pay this amount just like they pay rates. Even retirees are subject to land rates... er, um... aren't they?
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Rank: Member Joined: 4/3/2008 Posts: 48
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Lolest! wrote:MuchNo wrote:This is not my idea, but something I heard while discussing the matter earlier today. I thought it had merit, so when I saw this thread I thought I'd mention it.
Why not impose a one-time mandatory tax on properties. Yani, everyone who is a registered owner of a property has a 0.5% one-time tax imposed on their property. The value used should be the same as that used to determine rates. Hence a property valued at KES 10 million will result in a KES 50,000.00 tax on the property owner.
This could net hundreds of billions if not over a trillion Kenya Shillings for The Treasury, and would obviate the need to increase VAT -- in fact, it would result in a welcome reverse of that order. It would provide the government with funding for a few years (assuming not all budget expenditure must be met from this source), and would solve so many other issues.
Like I said, not my idea but I thought it was a good one. Your thoughts? We already have this. Land Rates collected by councils and now county govts.payable annually. On purchase, govt takes 4pc of value as stamp duty na haitosheki This would not be akin to land rates or stamp duty - this would be a revenue raising exercise where all other things remain as they are (as my econ lecturer used to say ceteris paribas). Land rates and stamp duty would remain as they are, payable annually or on transfer of land respectively.
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Rank: Elder Joined: 3/18/2011 Posts: 12,069 Location: Kianjokoma
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@much no, how much will this ONE time charge of 0.5pc add to the taxman? Consider that stamp duty is 2 or 4 pc yet it's not the main souece of govt revenue
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Rank: Member Joined: 4/3/2008 Posts: 48
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Lolest! wrote:@much no, how much will this ONE time charge of 0.5pc add to the taxman? Consider that stamp duty is 2 or 4 pc yet it's not the main souece of govt revenue The amount raised should be massive. The thing about stamp duty is that it's only payable when a property exchanges hands; a very small percentage of the land within the country changes hands at any given time (forget the hype about the so-called property boom resulting in a large exchange of land). This proposal would be universal, as in it would call on all property owners to pay the levy. Everyone, from Lord Delamare to the guy who buys a flat in Mlolongo, would be required to pay it. To capture all title holders, it could come in the guise of a (long-overdue) title validation exercise. The exercise would call for each Kenyan title to be entered into an (as yet to be established, computerised) Lands Office database (I'm being hypothetical here - the "dark forces" would never allow Lands Office to establish a computerised database any time soon) and a requirement for doing so would be the payment of the one-time fee.
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Rank: Elder Joined: 3/19/2010 Posts: 3,504 Location: Uganda
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http://mobile.nation.co....l/-/jjxeno/-/index.html
now income tax and excise tax set to increase punda amecheka
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Rank: Elder Joined: 9/23/2009 Posts: 8,083 Location: Enk are Nyirobi
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newfarer wrote:http://mobile.nation.co.ke/business/Treasury-plans-to-review--excise-and-income-tax-laws-/-/1950106/1996776/-/format/xhtml/-/jjxeno/-/index.html
now income tax and excise tax set to increase Misreporting. Reviewing Income Tax law is NOT the same as increasing tax rates! The norm around the world is to decrease Income Tax rates while increasing the VAT rates. It is not right that the payslip bearing middle class pays 30% of their salaries to run the government while the informal sector (which is thriving) pays nothing! Some landlords in Kibera earn as much as KShs 300k pm but dont pay tax. An employee of a blue chip earns KShs 300k pm and pays KShs 90k as PAYE tax. The best way to bring the informal sector to taxation is to tax their consumption through VAT. Yet people oppose the taxation of the products that are consummed by the non-taxpaying Kibera landlord. People complain thats VAT rates are high yet KE VAT rates are lowest in region KE-16%, - UG, TZ, RW, BR -18%! EU rates average 23%! The balance lies in reducing the employee PAYE rates and raising VAT rates. In the example above, if the PAYE is reduced to 15% and VAT increased to 20% the employee has an extra 45k in his pocket. He/she can decide to save and invest or to consume the extra 45k. If he chooses to save and invest, the fruits of investment will be taxed at the 15% income tax rate. If he/she chooses to consume he pays VAT at 20%. It is more attractive to invest! The current tax regime has turned the Kenya middle class into consumers and rat-racers. They pay high tax on their salaries at 30% but low tax on consumption at 16%. No wonder there is a very low motivation to save and invest. Life is short. Live passionately.
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Rank: Elder Joined: 6/27/2008 Posts: 4,114
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MuchNo wrote:This is not my idea, but something I heard while discussing the matter earlier today. I thought it had merit, so when I saw this thread I thought I'd mention it.
Why not impose a one-time mandatory tax on properties. Yani, everyone who is a registered owner of a property has a 0.5% one-time tax imposed on their property. The value used should be the same as that used to determine rates. Hence a property valued at KES 10 million will result in a KES 50,000.00 tax on the property owner.
This could net hundreds of billions if not over a trillion Kenya Shillings for The Treasury, and would obviate the need to increase VAT -- in fact, it would result in a welcome reverse of that order. It would provide the government with funding for a few years (assuming not all budget expenditure must be met from this source), and would solve so many other issues.
Like I said, not my idea but I thought it was a good one. Your thoughts? You should never impose tax on WEALTH. That is killing the goose that lays the golden eggs, so to speak. Tax is only imposed on income, that is the golden eggs. Leave the goose alone and it will continue laying the gold, so to speak! Nothing is real unless it can be named; nothing has value unless it can be sold; money is worthless unless you spend it.
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Rank: Elder Joined: 9/23/2009 Posts: 8,083 Location: Enk are Nyirobi
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mukiha wrote:MuchNo wrote:This is not my idea, but something I heard while discussing the matter earlier today. I thought it had merit, so when I saw this thread I thought I'd mention it.
Why not impose a one-time mandatory tax on properties. Yani, everyone who is a registered owner of a property has a 0.5% one-time tax imposed on their property. The value used should be the same as that used to determine rates. Hence a property valued at KES 10 million will result in a KES 50,000.00 tax on the property owner.
This could net hundreds of billions if not over a trillion Kenya Shillings for The Treasury, and would obviate the need to increase VAT -- in fact, it would result in a welcome reverse of that order. It would provide the government with funding for a few years (assuming not all budget expenditure must be met from this source), and would solve so many other issues.
Like I said, not my idea but I thought it was a good one. Your thoughts? You should never impose tax on WEALTH. That is killing the goose that lays the golden eggs, so to speak. Tax is only imposed on income, that is the golden eggs. Leave the goose alone and it will continue laying the gold, so to speak! @Mukiha true but not entirely so. Rates are a form of wealth tax. In Switzerland local govts (cantons) you pay a flat rate of tax depending on the size of your home. That is why rich Germans, French etc retire to Switzerland and buy a little villa.NB I am not supporting @MuchNo's proposal above. Life is short. Live passionately.
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Rank: Elder Joined: 5/21/2013 Posts: 2,841 Location: Here
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sparkly wrote:mukiha wrote:MuchNo wrote:This is not my idea, but something I heard while discussing the matter earlier today. I thought it had merit, so when I saw this thread I thought I'd mention it.
Why not impose a one-time mandatory tax on properties. Yani, everyone who is a registered owner of a property has a 0.5% one-time tax imposed on their property. The value used should be the same as that used to determine rates. Hence a property valued at KES 10 million will result in a KES 50,000.00 tax on the property owner.
This could net hundreds of billions if not over a trillion Kenya Shillings for The Treasury, and would obviate the need to increase VAT -- in fact, it would result in a welcome reverse of that order. It would provide the government with funding for a few years (assuming not all budget expenditure must be met from this source), and would solve so many other issues.
Like I said, not my idea but I thought it was a good one. Your thoughts? You should never impose tax on WEALTH. That is killing the goose that lays the golden eggs, so to speak. Tax is only imposed on income, that is the golden eggs. Leave the goose alone and it will continue laying the gold, so to speak! @Mukiha true but not entirely so. Rates are a form of wealth tax. In Switzerland local govts (cantons) you pay a flat rate of tax depending on the size of your home. That is why rich Germans, French etc retire to Switzerland and buy a little villa.NB I am not supporting @MuchNo's proposal above. Reminds me of something I came across in the news recently. Apparently, the U.K gov't has introduced a 'bedroom tax' (I think that's what they called it) on people occupying a home deemed as too large for them and hence being underutilized. This has raised a hue and cry with claims of many pensioners being reduced to penury since they're now saddled with extra tax obligations in an economy that has inadequate supply of the kind of homes they'd comfortably fit in. Life is like playing a violin solo in public and learning the instrument as one goes on.
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Rank: Elder Joined: 6/27/2008 Posts: 4,114
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sparkly wrote:mukiha wrote:MuchNo wrote:This is not my idea, but something I heard while discussing the matter earlier today. I thought it had merit, so when I saw this thread I thought I'd mention it.
Why not impose a one-time mandatory tax on properties. Yani, everyone who is a registered owner of a property has a 0.5% one-time tax imposed on their property. The value used should be the same as that used to determine rates. Hence a property valued at KES 10 million will result in a KES 50,000.00 tax on the property owner.
This could net hundreds of billions if not over a trillion Kenya Shillings for The Treasury, and would obviate the need to increase VAT -- in fact, it would result in a welcome reverse of that order. It would provide the government with funding for a few years (assuming not all budget expenditure must be met from this source), and would solve so many other issues.
Like I said, not my idea but I thought it was a good one. Your thoughts? You should never impose tax on WEALTH. That is killing the goose that lays the golden eggs, so to speak. Tax is only imposed on income, that is the golden eggs. Leave the goose alone and it will continue laying the gold, so to speak! @Mukiha true but not entirely so. Rates are a form of wealth tax. In Switzerland local govts (cantons) you pay a flat rate of tax depending on the size of your home. That is why rich Germans, French etc retire to Switzerland and buy a little villa.NB I am not supporting @MuchNo's proposal above. The fact that others are doing it doesn't mean it is right. Taxing wealth is simply wrong... even the church doesn't ask you to tithe from your wealth, it asks for 10% of income... in the old days, it was 10% of your harvest, not 10% of your land!! Nothing is real unless it can be named; nothing has value unless it can be sold; money is worthless unless you spend it.
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Rank: Veteran Joined: 11/21/2006 Posts: 1,590
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Its the height idiocy to have two governments running in parallel. You can have devolution (gavana, Senator) and county commissioners as an example. I saw chiefs the other day! Anyway, Tax should be so simple as tax and spend. If you want to build roads, you tax road users i.e. tolls. If county spend is where issues are, tax must then be moved to the counties... Sehemu ndio nyumba
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