KENYA’S President William Ruto has announced significant amendments to the contentious Finance Bill that has sparked widespread protests in the capital, Nairobi. The revisions, presented by Ruto and Finance Committee Chairman Kimani Kuria to MPs and Senators at the State House on Tuesday, aim to address public concerns.
Ruto emphasised that the changes reflect the input of the people and various stakeholders gathered during public consultations. ‘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 stated.
Key amendments to the Finance Bill
The Finance Bill has undergone several modifications:
- Removal of VAT on essential goods: The proposed 16 percent VAT on bread, transportation of sugar, financial services, and foreign exchange transactions has been eliminated.
- No increase in mobile money transfer fees: The bill no longer includes an increase in fees for mobile money transfers.
- Excise duty on vegetable oil removed: The excise duty on vegetable oil has been scrapped.
- Housing Fund and Social Health Insurance exempt from income tax: Levies on the Housing Fund and the proposed levy on Social Health Insurance will not attract income tax.
- Eco Levy adjustments: The proposed Eco Levy will only apply to imported finished products that contribute to electronic waste. Locally manufactured products, including sanitary towels, diapers, phones, computers, tyres, and motorcycles, are exempt.
Ruto stressed the government’s commitment to supporting local manufacturing and protecting jobs. ‘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,’ he said.
VAT registration and ETIMS
The threshold for VAT registration has been increased from KSh5 million to KSh8 million, exempting many small businesses from needing to register for VAT. Additionally, the electronic invoicing system ETIMS, recently introduced by the Kenya Revenue Authority, has been rescinded for farmers and small businesses with a turnover below KSh1 million.
President Ruto concluded by affirming the ongoing collaboration between the Executive and the Legislature to make decisions that benefit the country.
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