Kenyans have breathed a sigh of relief as the government has withdrawn several controversial proposals from the Finance Bill 2024, which was slated for tabling in the National Assembly on Tuesday afternoon. This decision follows significant public outcry and pressure.
Among the key proposals scrapped after a meeting of ruling coalition MPs led by President William Ruto at State House Nairobi are:
These revisions aim to address public concerns and ensure that the Finance Bill reflects broader economic considerations while mitigating adverse effects on citizens and businesses alike.
1. The proposed 16 per cent on bread has been dropped.
2. Excise duty on vegetable oil removed.
3. Transfer of mobile services is a key concern for many Kenyans hence no increase on transaction of mobile phone transfer services. The status quo remains.
4. We proposed that statutory deductions such as Housing Levy, SHIF to be tax deductible and hence allow what is subjected to PAYE is an amount less than what was therebefore so more disposable income.
5. Eco levy will only be tangible to imported finished products. All locally manufactured items including diapers and sanitary towels will not be subject to eco-levy.
6. VAT Threshold; increase from Ksh.5 million to Ksh.8 million hence SMEs that have turnover of less than Ksh.8 million don’t have to register for VAT.
7. eTIMS – Small businesses that have turnover of less than Ksh.1 million should be exempted from eTIMS.
8. Eggs, onions, potatoes, – proposed excise duty only on imported eggs, onions and potatoes hence locally produced to be more marketable.
9. Fight against illicit brew – change in excise duty from volume to alcohol content hence those producing very high alcohol content will pay more excise duty.
10. To support pension contributions: Increase amount allowable for Taxable contributions from Ksh.20,000 to Ksh.30,000 monthly.
11. Money allocated for JSS – hire all 46,000 JSS intern teachers for permanent and pensionable terms. In addition to recruit another 20,000.
12. Motor Vehicle Tax – The motor vehicle tax cannot be amended through Income Tax Act. Pegging it on insurance would cripple the insurance business and hence the proposal has been dropped.
13. Sugarcane Transportation: Remove VAT on transportation of sugarcane from farms to the milling factories.
