Kenyans have been protesting the Financial Bill 2024, which the government proposed in a bid to raise more money through new taxes.
On June 18, many Kenyans showed up to protest the bill that was set to be passed in parliament under the #OccupyParliament movement to demand the new taxes be dropped.
This led to a meeting at Kenyan President Dr William Ruto’s State House to deliberate on the issue that most citizens decried as punitive taxes.
However, moments after the consultations, the president and his deputy, flogged by their party members addressed the media.
Here are the changes they have proposed on the Finance Bill 2024 that is being tabled in the Kenyan parliament on June 18 as shared by Kuria Kimani, the Molo MP and Chairman, Finance and National Planning Committee in parliament.
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The Kenyan government has proposed that the 16 percent VAT on bread be dropped to make it affordable to citizens.
The is also a proposal to be made on vegetable oil to ensure that it is affordable and easily accessible to Kenyans.
“Transfer of mobile services is a key concern to many Kenyans and therefore again, we have proposed that we do not have any increase on taxation on mobile phone transfers,” said Molo MP.
The new proposals also touched on the proposed housing and Social Health Insurance Fund (SHIF) that saw many Kenyans decry over-taxation.
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Now, the Kenyan government has proposed that the taxes be under Pay As You Earn (PAYE) rather than be additional taxes.
“We all agree that environmental conservation is a key concern. We had a drought and a few months of flood, and our drainage clogging, we have agreed that we need to make a good decision about how to protect our environment. That was the wisdom to the introduction of eco levy. However, imposing this on locally manufactured goods would again increase the cost of those locally manufactured goods in the country and stand a risk of making them not competitive in the East African market and globally. Therefore, this eco levy will only be chargeable to imported finished products,” added Kimani.
This means that all locally manufactured goods in Kenya, including diapers and sanitary towels will not be subjected to eco levy.
Additionally, Small and Medium Enterprises (SMEs) that have a turnover of less than US $62K (KSh 8,000, 000) will not be mandated to register for the VAT.
“On eTIMS, we have heard avocado farmers being asked to give eTIMS receipts. We have heard mama mbogas who do their supplies to hotels being asked to register for eTIMS, we have proposed that these people be given the exemption on eTIMS registration, especially for farmers and small businesses that have a turnover of below US$8000 (KSh 1 million),” added Kuria.
There is also a proposal to shield poultry and potato farmers. There will only be an excise duty for imported eggs, potatoes, and onions.
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Companies producing alcohol with high alcohol content will be expected to pay high duty with those making alcohol with lower content paying less duty. They however did not specify the specific duty.
“To support our pension contributions, because we will all retire one day, we are now increasing the amount allowable for tax exemptions for pension contribution from US$156 to US$233 (KSh 20,000 to KSh 30,000) per month. It is exempt at contribution and exempt when you receive your pension,” added the Molo MP.
Junior Secondary School teachers will also get permanent jobs after an appraisal that will see them get pensions.
The Motor Vehicle Tax has been dropped with the government acknowledging that that pegging the taxes on insurance would cripple the insurance industry in Kenya.
VAT on sugarcane transportation has also been removed from the farms to the milling factories due to the cost of production being high due to transportation.
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