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Finance Bill: Lawmakers repeal ‘punitive tax’ after Kenyan protests

Protesters in Nairobi
Kuria Kimani

Finance Bill: Kenyans took to the streets of Nairobi on Tuesday morning to protest against the proposed bill. The National Assembly Finance Committee bowed to pressure from various interest groups and removed a number of controversial clauses from the Finance Bill 2024. The committee is set to present its report with recommendations to the House this afternoon. This comes after lawmakers from the ruling Kenya Kwanzas and opposition Azimio were called into a meeting with their respective leaderships on Tuesday to firm up their stance on the bill.

The Kenya Kwanzas leader President William Ruto on Tuesday in State House of Assembly came after his courageous deputy Rigathi Gachagua accused of inciting lawmakers linked to the president to reject the bill over its punitive proposals. Azimio also called on lawmakers to reject the bill, but it remains that how lawmakers will approach the bill’s consideration as the committee has recommended the scrapping of punitive taxes.

Tax Changes

The Kimani Kuria-led committee announced changes in a national address.  Thus, noting that a percent retained instead of the 20 percent proposed. Consequently, lighting the inflationary pressures facing many Kenyans. Banking Services The 16 percent value added tax on financial services and foreign exchange transactions scrapped.

Eco Tax The eco tax is only levied on imported finished goods. Locally manufacturing products such as sanitary napkins, diapers, phones, computers, wheelchair tyres and motorcycles are not covered in the green tax. The move is aimed at protecting local production and ensuring jobs. Abolition of excise duty on import eggs. The committee proposed to impose an excise duty on onions, eggs, potatoes and onions to protect local producers. However, it not clear whether this applies to onions, potatoes and eggs from East African Community countries.

Other changes in finance bill,

The 16 percent value tax on bread among the scrapped. However, it is unclear whether the tax rate continue to fall to zero or move to an exemption. The move to a tax credit scheme means that manufacturer not able to claim input tax. And thus pass on the 2.5% motor vehicle tax to the end consumer. The Commission rescinded the 2.5% tax on motor vehicles as it would cripple the insurance sector

The committee noted that the tax should levy under income tax. E-Tims for Farmers Farmers with turnover of less than 1 million lice. Furthermore, exempted from the requirement to issue tax invoices through the electronic tax invoice management system, e-Tims. Proposal to allow KRA to spy on Kenyans The Commission rejects a proposal to amend the Data Protection Act to make the processing of data relating to the assessment, enforcement and collection of taxes exempt from tax.  read on…

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