President Ruto Announces 16 Key Amendments to Controversial Finance Bill 2024(LIST)
As Kenyans gathered to protest, President William met with Kenya Kwanza lawmakers at the State House to discuss the controversial Finance Bill 2024.
For several weeks, various proposals in the bill sparked widespread concern due to their punitive nature, which was expected to further reduce workers’ paychecks and increase the cost of living.
At around 10:00 am, the President and his team announced 16 major amendments to the bill, which were largely welcomed as a relief across the country.
Here are the 16 changes made:
- The Finance Committee agreed to remove the proposed 16 percent Value Added Tax on bread following public outcry. Manufacturers had predicted that the VAT would raise the price of standard bread by Ksh10.
- The President approved the elimination of excise duty on vegetable oil. The original proposal had included a 25 percent excise duty on vegetable oils, which the Kenya Association of Manufacturers (KAM) warned could increase cooking oil prices by 80 percent and affect other products like soap.
- The VAT on the transportation of sugar cane was removed. The initial bill proposed a 16 percent VAT on cane transport to sugar factories, potentially raising sugar prices.
- The VAT on financial services and foreign exchange transactions was also removed. The original proposal could have raised taxes on financial services from 15 percent to 40 percent, impacting forex transactions.
- The proposed increase in mobile money transfer charges was reversed. The Treasury had suggested raising excise duty on these transfers from 15 percent to 20 percent.
- The proposed motor vehicle tax, which faced significant opposition from motorists, was removed. This proposal required vehicle owners to pay 2.5 percent of their car’s value annually, with a minimum of Ksh5,000 and a maximum of Ksh100,000.
- The proposed Housing Fund and Social Health Insurance levies were converted to tax deductibles, meaning they will not be subject to income tax, leaving more money in employees’ pockets.
- The government adjusted the proposed Eco Levy to apply only to imported finished products, sparing locally manufactured products. Manufacturers had argued that the levy would hinder local manufacturing growth.
- The Eco Levy will not apply to locally manufactured products such as sanitary towels, diapers, phones, computers, tires, and motorcycles.
- Small businesses valued at less than Ksh8 million will be exempt from VAT registration. Previously, the requirement applied to businesses valued above Ksh5 million.
- Farmers and small businesses with less than Ksh1 million in turnover will not be required to register for the electronic Tax Invoice Management System (eTIMS).
- Excise duty was imposed on imported table eggs, onions, and potatoes to protect local farmers. The Finance Bill had initially proposed a 16 percent VAT.
- The excise duty on alcoholic beverages will be based on alcohol content rather than volume. Higher alcohol content will attract more excise duty, encouraging manufacturers to produce safer and cheaper alcohol.
- The exemption limit for pension contributions was raised from Ksh20,000 to Ksh30,000.
- In response to concerns over budget cuts for recruiting Junior Secondary School interns, the Committee increased the allocation from Ksh13.4 billion to Ksh18 billion.
- Funds were allocated to hire 20,000 teacher interns next month, with a policy to transition them from internship to permanent and pensionable positions.
President Ruto Announces 16 Key Amendments to Controversial Finance Bill 2024(LIST)
