Finance Bill 2019 Becomes a Law
Finance Bill 2019 finally signed into Law by President Uhuru Kenyatta on the 11/8/2019.
The Act repeals section 33b of the Banking Act that provides for the capping of bank interest rates.
The new law will also impose tax on income raised from the digital marketing in order to equitable taxation. Technically the expectations from revoking section 33b of the Banking Act is expected to enhance access to loans by the private sector especially the Micro, Small and Medium Enterprises (MSME’s) and other unregulated lenders.
This Bill was passed in order to pave way for the government resolution to achieve the Big 4 Agenda. The Act does not restrict the National Housing Development Fund from income tax.
The rate cap was considered a third wheel to private lending institutions .Existing Loans have however been covered from the expected amplification of interest rates.
In the long-term this new Law is expected to have a slackening effect in Kenya’s Real Estate market. The middle class who are usually very cautious on matters interest rates will shy away from borrowing.
Stiff competition in the Primary Mortgage Market will however naturally regulate the Lenders who will strive to outdo each other.
