Just hours to the tabling of the controversial Finance Bill 2024, the government has announced that several proposals of the bill have been dropped.
This comes after an early morning parliamentary Group meeting by the ruling party, Kenya Kwanza.
The proposals dropped include; the proposed 16 per cent on bread, excise duty on vegetable oil, mobile service transaction among others
“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.
” 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 there before so more disposable income,” the government said.
The government added that 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.
“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.
“eTIMS – Small businesses that have turnover of less than Ksh.1 million should be exempted from eTIMS,” the government stated.
Below are further amendments;
- Eggs, onions, potatoes, – proposed excise duty only on imported eggs, onions and potatoes hence locally produced to be more marketable
- 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.
- Â To support pension contributions: Increase amount allowable for Taxable contributions from Ksh.20,000 to Ksh.30,000 monthly.
- Money allocated for JSS – hire all 46,000 JSS intern teachers for permanent and pensionable terms. In addition to recruit another 20,000.
- 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.
- Sugarcane Transportation: Remove VAT on transportation of sugarcane from farms to the milling factories.
After the meeting, while addressing the nation, Kikuyu Mp and National Assembly’s leader Kimani Ichung’wah said that government had listened to Kenyans hence the decision to withdraw some of the proposals.”
We take this opportunity to tell the country that we have listened to you. We have heard you and the committee has briefed the Parliamentary Group on the proposed changes that they have proposed to the Finance Bill 2024/2025 that capture many issues that were raised by stakeholders during the public participation,” he said.
