MPs approve Finance Bill despite protests
Kenya’s National Assembly has moved forward with the contentious Finance Bill 2024 despite significant public opposition, setting up intense parliamentary debates before the June 30 deadline.
A majority of 204 MPs supported the Bill’s progression, 115 opposed it, and there were no abstentions.
This decision follows a heated vote after the Bill’s Second Reading, indicating lawmakers’ determination to advance it despite growing calls from the public for its rejection.
However, this legislative step does not grant the bill immediate legal status; it must pass through two more stages to become law.
The next phase involves detailed scrutiny in the Committee of the Whole House, where proposed amendments will be thoroughly reviewed.
Political divisions have become apparent, with the Azimio la Umoja One Kenya Coalition strongly opposing the Bill, while the Kenya Kwanza Coalition remains in favor.
Led by Molo MP Kuria Kimani, the National Assembly Finance Committee has suggested changes to mitigate the strong objections to the bill.
Among these changes are a reduction in excise duties on mobile money transfers from 20% to 15% and the removal of the 16% VAT on financial services and foreign exchange transactions to alleviate consumer financial burdens.
To support local industries, the committee recommended excise duties on imported onions and potatoes while removing such duties on imported eggs.
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Additionally, the committee has eliminated the 16% VAT on bread, though its tax classification remains unresolved.
The committee has also suggested repealing the 2.5% motor vehicle tax, due to concerns about its impact on the insurance sector, advocating against its inclusion in Income Tax regulations.
Small-scale farmers with annual turnovers below Ksh1 million could benefit from an exemption from mandatory use of the Electronic Tax Invoice Management System (e-Tims).
The Finance Bill now enters a crucial phase where MPs can further shape its final form through additional discussions and amendments.
A decisive vote is anticipated next week to determine if the Bill will be adopted, potentially becoming law on July 1.
Failure to pass the Finance Bill could trigger a fiscal crisis, with significant implications for Kenya’s national budget and future economic policy.
MPs approve Finance Bill despite protests