Gov't Proposes Stamp Duty Exemption for Land Worth Ksh1 Million or Less

The National Treasury has proposed exempting land transactions valued at Ksh1 million or less from stamp duty.

Speaking during Mashujaa Day celebrations on Tuesday, October 20, President William Ruto said the government is also seeking to introduce progressive rates for higher value transactions.

"The National Treasury has developed proposals to exempt land transaction valued at Kenya shillings one million or less from stamp duty, and introduce progressive rates for higher value transactions," he said.

Ruto said the changes were intended to lower the costs associated with property ownership, particularly for citizens at the bottom of the income pyramid.

"This will help reduce the cost of acquiring and transferring land, especially for citizens at the bottom of the pyramid, and strengthen every Kenyan's ability to own property," he added.

At the same time, Ruto announced a proposal to exempt Kenyans earning Ksh32,333 per month or less from paying Pay As You Earn (PAYE) income tax.

He said the government had prepared measures to ease the tax burden on low-income earners.

"We have prepared a proposal to exempt Kenyans earning Ksh32,333 per month or less to be exempted from paying pay-as-you-earn income tax," he stated.

Ruto said the proposed exemption would help workers cope with the rising cost of meeting basic needs, including food, transport and education expenses.

"For workers on modest incomes, every shilling saved means more money for food, transport, school expenses, and the needs of their families," he further said.

Ruto also announced plans to pursue the removal of the 25 per cent import duty on mobile phones, a move that could reduce the cost of purchasing the devices if the proposal is implemented.

He said the government would undertake the necessary legal and regional customs processes to facilitate the removal of the duty, noting that mobile phones had become essential tools for education, business, banking and employment.

"We will pursue the necessary legal and regional customs processes, so that we remove the 25% import duty on mobile phones. As we all know, a mobile phone is no longer a luxury. It is a classroom, a marketplace, a bank, and an office. 

"For many young Kenyans, a gateway to employment. Making phones more affordable will bring the opportunity of the digital economy within reach of more citizens," he noted.

Elsewhere, this development comes weeks after the Cabinet approved the settlement of verified government pending bills worth Ksh23.74 billion, covering claims of Ksh50 million and below.

According to a Cabinet Dispatch issued on Friday, October 9, the payments will cover 28,726 verified bills out of the 29,257 claims recommended for settlement following a review by the Pending Bills Verification Committee.

According to the Cabinet, the approved payments represent 98 per cent of the claims recommended for settlement, with the government seeking to address longstanding financial obligations to businesses.

"The payment of 28,726 verified bills totalling KSh23.74 billion, representing 98 per cent of the 29,257 recommended for settlement, will bring long-awaited relief to thousands of suppliers and contractors, some owed money since 2005," the dispatch read.

The decision followed an extensive verification exercise aimed at establishing the validity of claims submitted by businesses and contractors seeking payment for outstanding government obligations.

The committee received more than 115,000 claims valued at Ksh664.8 billion, before recommending a smaller portion for settlement after reviewing the submissions.

"The decision follows a comprehensive review by the Pending Bills Verification Committee, which received 115,617 claims worth KSh664.8 billion. Following verification, 29,257 claims valued at KSh155.34 billion were recommended for settlement," the dispatch added.

The National Treasury will oversee the implementation of the Cabinet decision and coordinate the release of funds to the approved beneficiaries.

The government expects the payments to ease financial difficulties faced by businesses that have struggled to sustain operations while waiting for money owed for completed contracts and supplied goods or services.

"The National Treasury will oversee implementation, releasing much-needed funds to businesses struggling with delayed Government payments, easing cash-flow pressures, protecting jobs and restoring confidence among suppliers and contractors," the dispatch further read.