President William Ruto says the changes to the Finance Bill have taken into account the views of the people and other stakeholders during public participation sessions.
Speaking during the Kenya Kwanza Parliamentary Group meeting at State House Nairobi president Ruto commended Kenyans for their contributions through public participation.
President Ruto also affirmed that the Executive and the Legislature will continue to collaborate in making the right decisions for the country.
“We are going to end up with a product in Parliament that came from the Executive and has been interrogated by the Legislature. Through public participation, the people of Kenya have had a say,” he said.
The Finance Bill has undergone significant amendments, removing the proposed 16% VAT on bread, transportation of sugar, financial services, foreign exchange transactions, and the 2.5% Motor Vehicle Tax. Additionally, there will be no increase in mobile money transfer fees, and the Excise Duty on vegetable oil has been removed. Levies on the Housing Fund and Social Health Insurance will not attract income tax, leaving more money in employees’ pockets.
The proposed Eco Levy will be imposed only on imported finished products that contribute to e-waste, excluding locally manufactured products like sanitary towels, diapers, phones, computers, tyres, and motorcycles. President Ruto emphasized that this measure aims to curb the importation of products that can be locally produced, thereby protecting local manufacturing and securing jobs.
The VAT registration threshold has been raised from KSh5 million to KSh8 million, exempting many small businesses from VAT registration. The electronic invoicing ETIMS, introduced by the Kenya Revenue Authority, has been rescinded for farmers and small businesses with a turnover below KSh1 million. The Bill also imposes excise duty on imported table eggs, onions, and potatoes to protect local farmers. Alcoholic beverages will now be taxed based on alcohol content rather than volume.
The exemption for pension contributions will increase from KSh20,000 to KSh30,000 per month. More resources have been allocated to education, with KSh18 billion provided for the employment of Junior Secondary teachers on internship and funds to hire 20,000 interns next month.
President Ruto highlighted that tough decisions have led to a drop in inflation from 9% in 2022 to 5.1% in May, and the strengthening of the shilling against the dollar. He stated that the government aims to achieve a balanced budget within three years to reduce borrowing and ensure financial sustainability.
The new university funding model has improved the financial situation of public universities, allowing parents who can afford to pay for their children’s education to forego scholarships, thus benefiting students from poorer families.
Deputy President Rigathi Gachagua noted that increasing taxes on high-alcohol-content beverages will aid in the fight against alcoholism. He also mentioned that increased funding for the National Government Constituency Development Fund will enable MPs to drive transformative development in their constituencies.