The government has decided to eliminate several contentious proposals from the Finance Bill 2024, which is set to be presented in the National Assembly on Tuesday afternoon.
The withdrawal of these proposals comes after sustained public opposition.
Among the withdrawn proposals is the plan to impose a 16 percent Value Added Tax on bread, financial services, and foreign exchange transactions.
This decision was announced after a meeting of members of parliament from the ruling Kenya Kwanza coalition, led by President William Ruto, at State House Nairobi.
Here is a list of the modifications made to the Finance Bill 2024:
1. The proposed 16 percent VAT on bread has been scrapped.
2. The excise duty on vegetable oil has been removed.
3. There will be no increase in transaction fees for mobile phone transfer services.
4. Statutory deductions such as the Housing Levy and NHIF will now be tax-deductible, reducing the amount subject to PAYE and increasing disposable income.
5. The eco-levy will apply only to imported finished products; locally manufactured items, including diapers and sanitary towels, are exempt.
6. The VAT threshold will be increased from Sh.5 million to Sh.8 million, exempting SMEs with a turnover of less than Sh.8 million from registering for VAT.
7. Small businesses with a turnover of less than Sh.1 million will be exempt from eTIMS.
8. Excise duty on eggs, onions, and potatoes will only apply to imported goods, promoting the marketability of locally produced items.
9. To combat illicit alcohol, excise duty will be based on alcohol content, with higher content attracting more tax.
10. The allowable amount for taxable pension contributions will increase from Sh.20,000 to Sh.30,000 monthly.
11. Funding will be allocated to hire all 46,000 JSS intern teachers on permanent and pensionable terms, with plans to recruit an additional 20,000 teachers.
12. The motor vehicle tax proposal, which would have impacted insurance businesses, has been dropped.
13. VAT on the transportation of sugarcane from farms to milling factories has been removed.
Finance Bill 2024 Proposals Withdrawn Amid Public Outcry And Presidential Discussions
