VATupdate

Share this post on

Guidance note on the VAT transitional rules (rate change)

The Minister of Finance in early August 2022 announced the following temporary reduction in the rates of value added tax (VAT)—for the period 1 August 2022 through 31 January 2023:

  • Reduction in the standard VAT rate to 12% (from 14%)
  • Reduction in the VAT rate for cooking oil and liquid petroleum gas to 0% (from 14%)

During the statement to the National Assembly on cushioning the impact of rising inflation
‘on households and the economy, the Minister of Finance Honorable Peggy Serame
pronounced that the Government wishes to decrease the current rate of Value Added Tax
(VAT) from 14% to 12% and zero rate cooking oil and liquid petroleum gas.Following the announcement, a Value Added Tax (Decreas rate of tax) Order, 2022
was published on the 1* August 2022, proposing the amendment of section 7 of the VAT
Act, Cap 50:03, to reflect that VAT will be charged at the rate of 12% with effect from 3¢
August 2022.

The purpose of this Guidance Note is to advise the public and VAT registered persons on
the effects of the change in rate on existing agreements that were entered into on the
basis of the 14% rate, and also to give an update on how the different categories of VAT |
registered persons will be affected by the change in the VAT rate.

Sources:

Sponsors:

VAT news

Advertisements: