A win for Kenyans: Gov't Eliminates Conflicting Tax Plans in Finance Bill 2024

ByBushuru Shammah
Published on: Jun 18, 2024 12:06
Finance Committee Chairperson Kimani Kuria during the briefing at state house || Photo Courtesy

The Government has retracted several contentious proposals from the Finance Bill 2024 following significant public opposition. These proposals, which included a 16 percent Value Added Tax (VAT) on bread, financial services, and foreign exchange transactions, will not be presented in the National Assembly as initially planned.

The decision was announced after a meeting at State House Nairobi, involving President William Ruto and members of parliament from the ruling Kenya Kwanza coalition.


1. The proposed 16 percent on bread has been dropped.

2. Excise duty on vegetable oil removed.

3. Transfer of mobile services is a key concern for many Kenyans hence no increase in transactions of mobile phone transfer services. 

4. The proposed statutory deductions such as Housing Levy, and SHIF to be tax deductible and hence allow what is subjected to PAYE to be an amount less than what was there before so more disposable income.

5. Eco levy will only be tangible to imported finished products. All locally manufactured items including diapers and sanitary towels will not be subject to eco-levy.

6. VAT Threshold; increase from Ksh.5 million to Ksh.8 million hence SMEs that have turnover of less than Ksh.8 million don't have to register for VAT.

7. Small businesses with a turnover of less than Ksh.1 million should be exempted from eTIMS.

8. Proposed excise duty only on imported eggs, onions, and potatoes hence locally produced to be more marketable.

9. Fight against illicit brew - change in excise duty from volume to alcohol content hence those producing very high alcohol content will pay more excise duty.

10. To support pension contributions: Increase the amount allowable for Taxable contributions from Ksh.20,000 to Ksh.30,000 monthly.

11. Money allocated for JSS to hire all 46,000 JSS intern teachers for permanent and pensionable terms and recruit another 20,000.

12. Motor Vehicle: the tax cannot be amended through the Income Tax Act. Pegging it on insurance would cripple the insurance business and hence the proposal has been dropped.

13. Sugarcane Transportation: Remove VAT on the transportation of sugarcane from farms to the milling factories.

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