18/06/2024
STATEMENT BY KENYA KWANZA PG AFTER MEETING AT STATE HOUSE ON 18TH JUNE, 2024
The Finance Committee of the National Assembly briefed the Kenya Kwanza Parliamentary Group on the report on the Finance Bill.
They included the following:
1. 16 per cent VAT on bread removed.
2. VAT on transportation of sugar also removed.
3. VAT on financial services and foreign exchange transactions has also been removed.
4. No increase on mobile money transfer.
5. 2.5 per cent Motor Vehicle Tax has also been removed.
6. Excise duty on vegetable oil removed
7. Levies on the Housing Fund and Social Health Insurance will become income tax deductible. This means the levies will not attract income tax, putting much more money in the pockets of employees.
8. It is crucial to point out that Eco Levy is being levied on imported finished products. Locally manufactured products will, therefore, not attract the Eco Levy. Locally assembly and manufacturing will help boost Kenya's manufacturing capacity, create jobs and save foreign exchange.
9. Consequently, locally manufactured products, including sanitary towels, diapers, phones, computers, tyres and motorcycles, will not attract the Eco Levy.
10. The threshold for VAT registration has been increased from KSh5 million to KSh8 million. This therefore means that many small businesses will no longer need to register for VAT.
11. Responsibility for electronic invoicing ETIMS, recently introduced by KRA, has been receded from farmers and small businesses with a turnover of below Ksh. 1 million.
12. Excise duty imposed on imported table eggs, onions and potatoes to protect local farmers.
13. Excise duty on alcoholic beverages will now be taxed 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.
14. Pension contributions exemption to increase from Ksh. 20,000 per month to Ksh. 30,000 .
15. The PG was also informed that adequate funds -KSh18 billion - have been provided for the employment of all 46,000 Junior Secondary teachers who are on internship.
16. Funds have also been provided to hire 20,000 interns next month. The policy is now to transition teachers from internship to permanent and pensionable terms.
17. His Excellency the President informed the PG that the Executive and the Legislature will continue making the right decisions no matter how difficult they are. He pointed out that last year’s proposal in Finance Bill 2023 has led to tremendous progress.
18. The President also commended national institutions for working effectively in a democratic Kenya. The National Assembly has changed the Finance Bill that was prepared by the Executive.
