Yesterday, the National Assembly’s Finance and Planning Committee Chairperson Kimani Kuria announced changes to the Finance Bill 2024.
The changes, which were announced hours before the Bill was tabled in Parliament, saw a number of tax proposals scrapped following pressure from members of the public and lobby groups.
These amendments are poised to significantly impact various sectors of the economy.
Here are the highlights:
VAT Adjustments: The Finance Committee announced the removal of 16% VAT on bread and VAT on transportation of sugar, aimed at reducing the cost burden on consumers.
Financial Sector Relief: VAT on financial services and foreign exchange transactions has been lifted, providing relief to businesses and consumers alike.
Stable Mobile Money Transfers: Contrary to speculation, there will be no increase in fees for mobile money transfers.
Motor Vehicle Tax Reduction: The Motor Vehicle Tax has been slashed by 2.5%, a move expected to benefit vehicle owners and industry players.
Excise Duty Changes: Excise duty on vegetable oil has been scrapped, aligning with efforts to make essential goods more affordable.
Tax Deductibility for Levies: Levies on the Housing Fund and Social Health Insurance will be deductible from income tax, enhancing disposable income for employees.
Eco Levy Implementation: Eco Levy will be imposed solely on imported finished products, incentivizing local manufacturing and boosting job creation.
Exemption Thresholds: The threshold for VAT registration has been raised from Ksh5 million to Ksh8 million, exempting more small businesses from VAT obligations.
Simplified Electronic Invoicing: Farmers and small businesses with turnovers below KSh1 million will no longer be burdened with electronic invoicing responsibilities.Support for Local
Agriculture: Excise duty on imported table eggs, onions, and potatoes has been introduced to safeguard local farmers.
Alcohol Excise Reform: Excise duty on alcoholic beverages will now be based on alcohol content rather than volume, potentially encouraging safer and more affordable alcohol production.
Pension Contribution Increases: The exemption limit for pension contributions has been raised from KSh20,000 to KSh30,000 per month, benefiting employees and promoting savings.
Education and Employment Initiatives: Ksh18 billion has been allocated to employ 46,000 Junior Secondary teachers permanently, and funds have been earmarked to hire 20,000 interns next month, supporting the transition of teachers to permanent role.
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