The Finance and national planning committee has dropped the 2.5 excise duty on motor vehicles that was to be paid by car owners through the insurance company, the 16 pc VAT on bread and has rescinded the decision to increase the digital tax on mobile money services tax in a major u turn of the tax proposals anchored in the Finance Bill 2024 set to raise an additional 300 billion shillings .
The committee has also made the statutory deduction proposed in the bill including the SHIF allowable so as to increase the disposable income of Kenyan households,
“The exercise we did on public participation was not an exercise in futility,” National Assembly Finance Committee Chair Kuria Kimani said.
“We have agreed that we must protect Kenyans from increased cost of living.”
Making the revelation from state house nairobi after hours long parliamentary group meeting, the committee chair, Kuria Kimani has averse the sharp protests the proposals had attracted during the public participation of the bill
Baby diapers, sanitary towels have also been spared from the eco levy as only manufacturers of imported finished products will shoulder the tax in efforts to contain the adverse effects of climate change.
Businesspersons are also set to breathe a sigh of relief as only those with a turnover of more than 8 million shillings will be forced to register under VAT, While those with a turnover of less than that a million shillings need not to onboard into ETIMS
Alcohol manufactures will however feel the pain of the taxation regime as the alcohol excise duty will be based on the alcohol content in the brews.
The U-turn in the taxes though a relief to Kenyans paints a grim picture on raising the projected 3.4 trillion shillings that underpins the financing of Ruto’s 4 Trillion shillings budget.
The report is set to be tabled before parliament this afternoon.
The house will then debate the bill from Wednesday ahead of voting day on Thursday maiming key opposition arguments that were fronted by the opposition.