Greetings and welcome to the eighteenth Money Weekly Roundup of 2024! 

This week, KRA is turning to the latest technology in its bid to collect more taxes by expanding its collection base and having all Kenyans captured in the tax bracket.

On the other hand, the government has announced a 6% rise in minimum wage for workers across various sectors to take effect from November 1st 2024. 

As always, we’ve included some of our favourite personal finance articles in our Finance Tips section below.

Let’s dive in.

NEWS RECAP

What happened this week

 🧑‍💻KRA Goes After Crypto Transactions in New Tax Strategy

Kenya Revenue Authority (KRA) is set to implement a new real-time tax system to track cryptocurrency transactions by integrating with crypto exchanges. This is aimed at capturing the growing number of over 4 million crypto users in Kenya to broaden the tax base. 

KRA is also incorporating artificial intelligence to improve fraud detection and streamline tax processes.

New Tax System:

• Transaction Details: The system will capture important information such as the date, time, type, and value of each transaction.

• Compliance with the Law: The integration will help enforce Section 3 of Kenya’s Income Tax Act.

• Addressing Revenue Losses: KRA aims to resolve issues of revenue losses due to outdated tracking methods, emphasising the need for an efficient system.

Importance of Crypto Market:

• Kenyans are increasingly turning to cryptocurrencies for preserving savings, commercial transactions, and remittances.

Challenges:

• The crypto sector remains largely unregulated, which poses challenges for KRA in integrating its systems with crypto exchanges.

Integration of Artificial Intelligence:

• KRA will also incorporate artificial intelligence (AI) to enhance its monitoring capabilities, streamline processes, detect fraud, and identify tax leakages. Read More.

💼 Government Announces 6% Rise in Minimum Wages

A 6% increase in minimum wages for workers across various sectors has been announced, set to take effect from November 1st, 2024.
Labour Cabinet Secretary Alfred Mutua confirmed this adjustment through a gazette notice, aiming to align wages with economic conditions and improve the standard of living for workers.

New Minimum Wage:

• Unskilled Employees: Ksh7,997 per month (Ksh335 per day)

• Stockmen and Herdsmen: Ksh9,235 monthly (Ksh391 daily)

• House Servants and Cooks: Ksh9,129 monthly

• Farm Foreman: Ksh14,427 monthly

• Farm Clerks: Ksh14,427 monthly

• General Labourers: Ksh16,113.75 monthly (up from Ksh15,201)

• Miners and Stone Cutters: Ksh17,402.97 monthly (up from Ksh16,417)

• Night Watchmen: Ksh17,976.54 monthly (up from Ksh16,959)

• Machine Attendants and Sawmill Workers: Ksh18,263.27 monthly (up from Ksh17,229)

• Machinists and Vehicle Service Workers: Ksh20,848.40 monthly (up from Ksh19,668)

• Printing and Bakery Machine Operators: Ksh21,748.87 monthly (up from Ksh20,517)

• Pattern Designers and Garment Cutters: Ksh24,818.31 monthly (up from Ksh23,413)

• Tailors and Medium-Sized Vehicle Drivers: Ksh27,352.40 monthly (up from Ksh25,804)

• Salesmen and Crawler Tractor Drivers: Ksh30,196.64 monthly

• Cashiers and Heavy Vehicle Drivers: Ksh36,360.92 monthly (up from Ksh34,302)

• Artisan Wages:

  • Ungraded Artisans: Ksh21,748.92

  • Artisan Grade III: Ksh27,352.45

  • Artisan Grade II: Ksh29,542.36

  • Artisan Grade I: Ksh36,360.92

These wage adjustments will affect all sectors across the economy including the agricultural sector, manufacturing sector and other industries. Read More.

🍞 Prices of Bread, Milk, & Maize Flour to Rise as Govt Announces New Tax Policy

The government is poised to implement higher taxes that will raise production costs for key commodities such as maize flour, bread, and milk, resulting in likely price increases for consumers.

• Treasury Cabinet Secretary John Mbadi announced on October 16 that the government plans to transition these commodities from the VAT (Value Added Tax) zero-rated category to the tax exempt category.

• Zero-rated goods can seek VAT refunds from the Kenya Revenue Authority (KRA) for input costs like electricity, fuel, and raw materials, whereas exempt goods cannot, leading to higher consumer prices as producers pass on the additional costs.

• The announcement follows months after President William Ruto withdrew the Finance Bill 2024 after widespread protests against proposed tax increases, which included a 16% VAT on bread. This contentious proposal contributed significantly to the bill's collapse. Read More.

🏦 JP Morgan Chase Bank Set to Open Office in Kenya

The Central Bank of Kenya (CBK) has announced that it has approved JP Morgan Chase Bank, the world's largest bank by market capitalization, to establish a representative office in Kenya.
This representative office will facilitate the marketing of JP Morgan’s products and services within the country while serving as a liaison between the parent firm and local clients. However, it's important to note that the office will not engage in primary banking activities such as lending or deposit-taking.

• The presence of the JPMorgan Chase representative office is expected to enhance the diversity of Kenya’s financial sector and catalyse trade and investments.

• In the previous year, deals closed by foreign financiers with representative offices increased by 13%, reaching Ksh 413.3 billion compared to Ksh 365.6 billion in 2022, encompassing various financing types such as corporate, trade, property, and project financing.

Other foreign banks with representative offices in Nairobi include the Bank of China, First Rand Bank from South Africa, Cooperative Rabobank of Mauritius, and Societe Generale from France.

Additionally, the CBK has successfully transitioned from the Kenya Electronic Payment and Settlement System (KEPSS) to the ISO20022 Global Messaging Standard, aimed at making payments faster, safer, and easier to track, positioning Kenya as a leading global payments destination. Read More.

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MONEY TIPS & TOOLS

This week’s finance tips

Welcome to Money254's Money Tips! Here, we share quick and easy tips that make understanding and managing your money a breeze. We break down the tricky parts of your finances and the financial landscape, making it simple and clear for you. Stay tuned for helpful tips every week.

MONEY254 #MONEYTOK OF THE WEEK

Buy, Build or Rent?

In today's #MoneyTok, we're looking into our buy, build or rent mini-series. In this specific video we discuss why many Kenyans prefer building instead of buying or renting. If you are contemplating getting yourself a house, check this mini-series out for guidance. Watch Video.

@money254hq

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That’s a wrap for this week’s Money Weekly!

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Tony and the Money254 editorial team.