In the Finance Bill 2024 debate, several contentious proposals were initially put forward but later withdrawn following public outcry and discussions between President William Ruto and Kenya Kwanza MPs at State House. The withdrawn proposals included:
- Dropping the plan to impose a 16% Value Added Tax (VAT) on bread, financial services, and foreign exchange transactions due to public pressure.
- Removing excise duty on vegetable oil.
- Maintaining the status quo on transaction fees for mobile phone transfer services without any increase.
- Making statutory deductions such as Housing Levy and SHIF tax-deductible to potentially increase disposable income.
- Applying eco levy only to imported finished products, exempting locally manufactured items like diapers and sanitary towels.
- Increasing the VAT threshold from sh. 5 million to sh. 8 million, benefiting SMEs.
- Exempting small businesses with turnover below sh. 1 million from eTIMS.
- Proposing excise duty solely on imported eggs, onions, and potatoes, while exempting locally produced items.
- Adjusting excise duty on alcoholic beverages based on alcohol content to combat illicit brews.
- Increasing taxable contributions for pension funds from sh. 20,000 to sh. 30,000 monthly.
- Allocating funds to permanently hire 46,000 JSS intern teachers and recruit an additional 20,000.
- Withdrawing the proposal to link motor vehicle tax with insurance premiums to avoid adverse impacts on insurance businesses.
- Granting VAT exemption on transportation of sugarcane from farms to mills.
These amendments reflect efforts to balance fiscal policy objectives with public welfare concerns, aiming to alleviate economic burdens while supporting key sectors and vulnerable groups impacted by the proposed tax reforms in Kenya.
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