President William Ruto has expressed confidence in the adjustments made to his contentious Finance Bill, which was tabled in Parliament on Tuesday, June 18, 2024.

In a statement shared on his X account after a Kenya Kwanza parliamentary group meeting at State House, Ruto attributed the revisions to the controversial bill to extensive public engagement.

“We have had a robust public engagement on the proposed Finance Bill. We have adjusted the document accordingly. We are glad we are having conversations about issues, and our institutions are working. This is how democracies function,” Ruto stated.

Revisions to Finance Bill

Earlier the National Assembly’s Finance and Planning Committee Chairperson Kimani Kuria announced changes to the Finance Bill 2024.

Among the key adjustments, the proposed 16% VAT on bread and VAT on the transportation of sugar have been removed. Additionally, VAT on financial services and foreign exchange transactions has been scrapped, and there will be no increase in mobile money transfer fees.

“The proposed 16 per cent VAT on bread has been removed. VAT on the transportation of sugar has also been removed. VAT on financial services and foreign exchange transactions has also been removed,” Kuria said.

Other changes include the removal of the 2.5 per cent Motor Vehicle Tax and excise duty on vegetable oil. Levies on the Housing Fund and Social Health Insurance will be income tax deductible.

“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,” he disclosed.

Kuria said locally manufactured products such as sanitary towels, diapers, phones, computers, tyres, and motorcycles will be exempt from the Eco Levy. The VAT registration threshold has been increased from Ksh5 million to Ksh8 million, reducing the need for small businesses to register.

The responsibility for electronic invoicing ETIMS by the Kenya Revenue Authority (KRA) has been removed for farmers and small businesses with a turnover below Ksh1 million.

The Molo MP also said excise duty will be imposed on imported table eggs, onions, and potatoes. Additionally, the excise duty on alcoholic beverages will now be based on alcohol content rather than volume, with higher alcohol content attracting more duty. The exemption for pension contributions has also been increased from Ksh20,000 to Ksh30,000.