Mwalimu-G
Elder Lister
Government to Introduce Tax on Education Services
Treasury CS Njuguna Ndung'u appearing before a Senate Committee on Monday, April 24, 2023
The National Treasury has proposed introducing taxes on some services offered by schools, which the government observes are not directly related to education.
In its Medium-Term Revenue Strategy (MRTS) for the Financial Year 2024/25 to the Financial Year 2026/27, the Treasury cited the fact that tax exemptions on education services across various schools are not uniform due to differences in fees charged and services provided.
Treasury also pointed out that the exemption from Value Added Tax (VAT) on education that includes all services provided by schools creates unfairness. The Njuguna Ndung'u-led ministry specifically pointed out swimming, observing that when offered out of school, the service is vatable.
“To remove this discrimination, there is a need to impose VAT on the additional benefits,” the Treasury stated.
The tax is one of the measures being introduced by the government to seal tax evasion loopholes and enhance taxpayer compliance.
Treasury Cabinet Secretary Njuguna Ndung’u further explained that the education tax and other new taxes introduced through the MRTS will help the government in implementing its development agenda.
In the document, Treasury said the threshold of the services will also be explored.
“Education services in Kenya are exempt from Value Added Tax to make education accessible to all learners. However, the benefit of the exemption is not uniform across all learners due to differences in fees charged and services provided,” the CS explained.
“In this respect, the Government will explore the introduction of VAT on services provided by schools but are not directly related to education,” Prof. Ndung'u outlines in the document.
The Ministry of Finance has also proposed taxation of insurance services at a general rate.
Apart from that, the Treasury has also proposed the removal of the threshold for applying the VAT input tax apportionment formula.
- by KIOKO NYAMASYO on Tuesday, 12 September 2023 - 4:42 pm
Treasury CS Njuguna Ndung'u appearing before a Senate Committee on Monday, April 24, 2023
The National Treasury has proposed introducing taxes on some services offered by schools, which the government observes are not directly related to education.
In its Medium-Term Revenue Strategy (MRTS) for the Financial Year 2024/25 to the Financial Year 2026/27, the Treasury cited the fact that tax exemptions on education services across various schools are not uniform due to differences in fees charged and services provided.
Treasury also pointed out that the exemption from Value Added Tax (VAT) on education that includes all services provided by schools creates unfairness. The Njuguna Ndung'u-led ministry specifically pointed out swimming, observing that when offered out of school, the service is vatable.
“To remove this discrimination, there is a need to impose VAT on the additional benefits,” the Treasury stated.
The tax is one of the measures being introduced by the government to seal tax evasion loopholes and enhance taxpayer compliance.
Treasury Cabinet Secretary Njuguna Ndung’u further explained that the education tax and other new taxes introduced through the MRTS will help the government in implementing its development agenda.
In the document, Treasury said the threshold of the services will also be explored.
“Education services in Kenya are exempt from Value Added Tax to make education accessible to all learners. However, the benefit of the exemption is not uniform across all learners due to differences in fees charged and services provided,” the CS explained.
“In this respect, the Government will explore the introduction of VAT on services provided by schools but are not directly related to education,” Prof. Ndung'u outlines in the document.
The Ministry of Finance has also proposed taxation of insurance services at a general rate.
Apart from that, the Treasury has also proposed the removal of the threshold for applying the VAT input tax apportionment formula.
