All 16 Changes in Finance Bill 2024
All 16 Changes in Finance Bill 2024
All 16 Changes in Finance Bill 2024
President William met at State House with Kenya Kwanza legislators to discuss the controversial Finance Bill 2024 while Kenyans turned out to protest. For weeks, several of the bill’s provisions caused worry among the general public due to their punitive tone, which was predicted to further depress employee wages and hike living expenses. The nation was essentially granted a relief when the head of state and his legions of political operatives emerged at 10:00 am with 16 significant amendments to the measure.
The 16 adjustments made are listed below: 1. In response to popular outcry, the Finance Committee decided to scrap the planned 16 percent Value Added Tax on bread. Manufacturers had calculated that the price of regular bread would rise by Ksh10 if the Finance Bill with the VAT passed. 2. The elimination of the vegetable oil excise charge was approved by the head of state. The Kenya Association of Manufacturers (KAM) claims that the proposal’s initial 25% excise levy on vegetable oils may have increased the cost of cooking oil by 80% and had unintended consequences for other goods like soap.
3. State House eliminated the Value-Added Tax (VAT) levied on sugar cane transportation. The state had suggested a 16 per cent value-added tax (VAT) on the cane transportation to the sugar plants in the controversial Bill, a move that may have caused sugar prices to soar. 4. The Committee eliminated the value-added tax (VAT) on foreign exchange and financial services. Initial versions of the proposal might have harmed forex transactions by raising financial services taxes from 15% to 40%. 5. The anticipated increase in the cost of mobile money transfers was also overturned by the new adjustments. The Treasury had suggested raising the excise tax on mobile money transfer fees from 15% to 20%.
- The Committee also decided to drop the proposed motor vehicle tax, which caused a lot of controversy among drivers. According to the idea, the annual payment for all car owners would be 2.5 percent of the car’s worth, with a Ksh5,000 base minimum and a Ksh100,000 maximum.
- The State House changed the proposed Housing Fund and Social Health Insurance charges from being subject to income tax to being tax deductibles, which will put a lot more money in workers’ pockets.
- The proposed Eco Levy was watered down by the government and is now only applied to imported completed goods. Therefore, the Eco Levy will not apply to products made locally. The fee, according to manufacturers, would have stunted the expansion of regional industry.
- Locally produced goods such as tyres, computers, phones, diapers, sanitary napkins, and motorcycles will not be subject to the Eco Levy.
- Small companies with less than Ksh8 million in revenue are exempt from the need to register for VAT. Prior to this, the proposal had removed the need for businesses valued at more than Ksh5 million.
- Following several months of back and forth, farmers and small companies with fewer
- Excise duty that had been imposed on imported table eggs, onions and potatoes to protect local farmers. The Finance Bill had proposed the introduction of 16 per cent VAT.
- The Committee revised the imposition of excise duty on alcoholic beverages on the basis of alcohol content and not volume. The higher the alcohol content the more excise duty it will attract. Consequently, alcohol manufacturers are expected to make safer and cheaper alcohol.
- The Committee increased pension contributions exemption from Ksh20,000 to Ksh30,000.
- After concerns over budget cuts in funds set aside for the recruitment of Junior Secondary School interns, the Committee has increased from Ksh13.4 billion to Ksh18 billion.
- Funds have also been provided to hire 20,000 teacher interns next month. The policy is now to transition teachers from internship to permanent and pensionable terms.
