Govt to Tax Non-Educational Services Offered by Schools
According to the government’s determination, the National Treasury has suggested taxing certain school services that are not specifically related to education.
The Treasury noted in its Medium-Term Revenue Strategy (MRTS) for the Financial Years 2024–25 to 2026–27 that tax exemptions on education services are not uniform across institutions due to differences in fees charged and services rendered.
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The Treasury has stated that, in order to address this discrimination, there is a necessity to apply VAT to the supplementary benefits.
The ministry led by Njuguna Ndung’u explicitly mentioned swimming, noting that the service is valuable when offered outside of school.
“To eliminate this discrimination, additional benefits must be subject to value-added tax according to the Treasury.
The tax is one of the measures the government is implementing to close tax exemptions and increase taxpayer compliance.
Treasury Cabinet Secretary Njuguna Ndung’u elaborated that the education tax and other new levies introduced through the MRTS will assist the government in carrying out its development agenda.
Treasury stated in the document that the threshold of the services will also be investigated.
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The CS explained that education services in Kenya are currently exempt from Value Added Tax (VAT) to ensure accessibility for all learners.
However, this exemption doesn’t apply uniformly to all learners due to variations in fees and services.
Therefore, as outlined in the document, the government is considering the introduction of VAT on services offered by schools that are not directly associated with education.
The Ministry of Finance proposes a flat-rate tax on insurance services.
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In addition, the Treasury wants the threshold for implementing the VAT input tax allocation formula be eliminated.
Govt to Tax Non-Educational Services Offered by Schools
