President William Ruto has signed into law, the controversial Finance Bill 2023, which was passed by the National Assembly last week.
Ruto assented to the Bill on Monday, June 26 morning at State House, Nairobi.
He also approved the Supplementary Appropriations (No. 2) Bill, 2023 warranting the additional spending by the National Government of Sh22.9 billion from the Consolidated Fund.
This results in the reduction of overall expenditure by Sh25.5 billion compared to the revised total National Government expenditure approved in the Supplementary Appropriations (No. 1), Act 2023.
The reduction comprises an increase in recurrent amounting to Sh9.5 billion and rationalization of development spending by Sh35 billion.
The scaling down in spending is in line with the government’s fiscal consolidation efforts in the light of debt servicing payments.
The Appropriations Bill, 2023 authorizes the withdrawal of money from the Consolidated Fund for the expenditure of the National Government.
It is the first Appropriations Bill under the Kenya Kwanza government and, therefore, seeks to align its Manifesto and promises through an assignment of actual resources to meet various services and projects.
Present were Deputy President Rigathi Gachagua, Prime Cabinet Secretary Musalia Mudavadi, Speaker of the National Assembly Moses Wetang’ula, Speaker of the Senate Amason Kingi, Attorney General Justin Muturi, and a host of MPs led by Majority leader Kimani Ichung’wah.
There were 87 proposed amendments to the Bill, some of which were approved on Tuesday as the National Assembly debated them late into the night.
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Among the most important proposals approved was a 16% value-added tax on gasoline, up from 8%.
Except for Githunguri MP Gathoni Wamuchomba, at least 184 MPs—mostly from Kenya Kwanza—supported the bill, while 88 MPs—mostly from Azimio—opposed the amendment.
The contentious Housing levy, which had initially proposed to be at three percent was also passed after it was amended to 1.5 percent of gross pay. It had been converted into a tax.
The initial proposal called for the levy to be a savings account that Kenyans could access after seven years.
Digital creators will be subject to a five percent tax. This figure was originally proposed to be 15%.
Betting and insurance withholding taxes will be charged at 12.5 percent and 16 percent respectively.
