Kenya: State Plans to Tax Schools Offering Services Not in Education Curriculum

14 September 2023

Nairobi — Services provided in schools that are not related to the education curriculum will soon be taxed under a new proposal by the National Treasury.

Treasury argues in the Draft Medium-Term Debt Strategy for the periods 2024/25 and 2026/27 that the current blacket value added tax (VAT) exemption is unfair as some institutions offer services that are vatable.

If the proposal is adopted, it means that learners in high-end schools will be impacted the most, as many of them offer lessons that are considered outside of Kenya's education system.

"However, the benefit of the exemption is not uniform across all learners due differences in fees charged and services provided. Some schools provide some services that are not directly related to education," Treasury says.

"The exemption from VAT on education that include all services provided by schools create unfairness as some services like swimming when offered out of school are vatable," it adds.

"To remove this discrimination, there is need to impose VAT on the additional benefits. In this respect, the Government will explore the introduction."

An imposition of additional taxes will hit parents who are already paying millions in school fees at top international schools.

In Kenya, for instance, learning institutions charge over Sh1 million per year for international curriculum courses.

Some of the expensive schools include Banda School, Hillcrest International School, and the International School of Kenya, among others.

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