Finance Act 2019 Supports the Development of REITS
The Finance Act 2019 was assented to by the president on November 7th 2019. The Act contains the inclusion of the amendment to section 20 of the Income Tax Act to include the exemption of REIT investee companies from income tax i.e. section 20 (1) (d). This was the final and most important tax clarification required for REITS. Please refer to section 9 of the gazetted Finance Act, 2019.
This is a big win and significant milestone for REITS Association of Kenya (RAK) and marks the first success to demonstrate the lobbying value of the Association. The milestone also demonstrates the Kenya Revenue Authority’s (KRA) and Capital Markets Authority’s (CMA) commitment to ensuring the success of REITs which are still relatively new in the Kenyan market and this will contribute significantly in the deepening of the capital markets.
The Finance Bill has been approved by Parliament and we now await publication by the KRA of the subsidiary tax legislations that will include the further expansion of Section 20 that will provide a more comprehensive tax guideline on REITS and REIT investee companies.