The National Assembly’s Finance and Planning Committee Chairperson Kimani Kuria has announced several changes to the Finance Bill 2024 which will see several proposed punitive taxes by the Ruto administration dropped.
Hundreds of protesters swarmed the Nairobi CBD on Tuesday morning to express their anger on Ruto’s tax hikes and the system he leads, which enables powerful elites to direct the state’s resources toward their interests while ignoring the hustlers who continue to struggle.
In this sense, the protests perfectly embody what the people can achieve, beyond their leaders when they rally together beyond political affiliations, to direct their discontent toward bad governance and unjust laws.
Today’s protests and the public uproar over President Ruto’s Finance Bill 2024 are a powerful reminder of the need to evaluate democracy from the bottom up as well as the top down.
The changes, announced by National Assembly’s Finance and Planning Committee Chairperson Kimani Kuria hours before the Bill is tabled in Parliament later today, will see several tax proposals scrapped after pressure from members of the public and lobby groups.
Among the levies scrapped from the Bill include the 16 percent VAT on bread, the Eco Levy on some items, and the hike of taxes on mobile money transfers.
“The proposed 16 percent VAT on bread has been removed. VAT on the transportation of sugar has also been removed. VAT on financial services and foreign exchange transactions has also been removed,” Kuria said.
Kuria also announced that the proposed Motor Vehicle Tax has also been removed.
Kuria Kimani further stated that to support the reduction of the cost of living Kenya Kwanza parliamentary group have come up with a way of making edible oil less expensive.
“Excise duty on vegetable oil removed,” he disclosed.
Levies on housing funds and Social Health Insurance (SHI) will be voluntary.
“Levies on the Housing Fund and Social Health Insurance will become income tax deductible. This means the levies will not attract income tax, putting much more money in the pockets of employees,” he disclosed.
In a new directive, Eco Levy will be levied on imported finished products. Locally manufactured products will, therefore, not attract the Eco Levy. Locally manufactured products will, therefore, not attract the Eco Levy. Locally assembly and manufacturing will help boost Kenya’s manufacturing capacity, create jobs and save foreign exchange.
On the other hand, the threshold for VAT registration has been increased from KSh5 million to KSh8 million. This therefore means that many small businesses will no longer need to register for VAT.
Kuria also stated that small-scale farmers and mama mbogas will be exempted from electronic invoicing that was introduced by the Kenya Revenue Authority (KRA).
Excise duty will be imposed only on imported eggs, a move aimed at protecting local farmers.
Responsibility for electronic invoicing ETIMS, recently introduced by KRA, has been receded from farmers and small businesses with a turnover of below Ksh. 1 million.
Excise duty on alcoholic beverages will now be taxed based on alcohol content and not volume. The higher the alcohol content the more excise duty it will attract.
Pension contributions exemption will increase from Ksh20,000 per month to Ksh30,000.
During today’s meeting, President Ruto informed the PG that the Executive and the Legislature will continue making the right decisions no matter how difficult they are. He pointed out that last year’s proposal in Finance Bill 2023 has led to tremendous progress.
The President also commended national institutions for working effectively in a democratic Kenya. The National Assembly has changed the Finance Bill that was prepared by the Executive, is as it should be.
