Finance Bill 2024 Amendments

New Finance Bill 2024 Amendments

There was a Tuesday Parliamentary Group meeting at State House Nairobi to discuss the infamous Finance Bill proposals 2024. MPs and Senators, allied to the Kenya Kwanza alliance, were taken through the changes made to the bill by Finance Committee Chairman Kimani Kuria.

President William Ruto said the changes took into account the views of Kenyans, stakeholders, and independent organizations during public participation sessions. He commended Kenyans for their contributions to public participation forums.

“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,” Ruto said.

The Finance Bill 2024 has been amended as follows:

  • 16% VAT on bread
  • transportation of sugar
  • financial services
  • foreign exchange transactions
  • 2.5% Motor Vehicle Tax
  • Eco levy on locally manufactured products, including sanitary towels, diapers, phones, computers, tires, and motorcycles.

He said the Eco Levy will be imposed on imported finished products, while those locally manufactured are exempted. The proposed Eco Levy will only be imposed on imported finished products that contribute to e-waste and thus harm the environment when they are no longer in use.

The threshold for VAT registration has been increased from KSh5 million to KSh8 million, meaning that many small businesses will no longer need to register for VAT.

The electronic invoicing ETIMS, recently introduced by KRA, is exempted from farmers and small businesses with a turnover of below KSh 1 million.

The Finance Bill has also imposed excise duty on imported table eggs, onions, and potatoes to protect local farmers.

Finance Bill 2024 Amendments
Onion bulbs after harvesting/More tax on imported onions

Excise duty on alcoholic beverages will now be taxed based on alcohol content and not volume. Deputy President Rigathi Gachagua said increasing tax on alcohol with high alcoholic content will boost the fight against alcoholism.

Additionally, pension contributions exemption will increase from KSh20,000 per month to KSh30,000.

Additionally, there will be no increase in mobile money transfer fees. The Excise Duty on vegetable oil has also been removed.

Other Amendments

Levies on the Housing Fund and the proposed one on the Social Health Insurance Fund will not attract income tax. According to the President, this will put more money in employees’ pockets.

The President said the government is making efforts to curb the importation of products that can be locally produced, thus protecting local manufacturing and securing jobs for the people.

President Ruto said tough decisions have yielded fruits, citing the drop in inflation from 9% in 2022 to 5.1% in May and the strengthening of the shilling against the dollar.

He said the government is working on achieving a balanced budget in the next three years, pointing out that this will reduce borrowing and ensure that the country lives within its means.

President Ruto said the new university funding model has revolutionized the financial situation of public universities, noting that parents who can afford to pay for their children’s education have not applied for scholarships, freeing up more money for students from poor families.