Search for Savings & Loans
Finance Bill 2024: Govt Makes U-Turn, Drops Unpopular Clauses
News and Analysis

Finance Bill 2024: Govt Makes U-Turn, Drops Unpopular Clauses

The government has backtracked on several controversial clauses initially proposed in the Finance Bill of 2024. The National Assembly's Finance Committee Chair Kimani Kuria announced major amendments to the proposed law after Kenya Kwanza MPs met President William Ruto for a Parliamentary Group meeting on Tuesday, June 18.

One of the most contentious proposals was related to the introduction of the Motor Vehicle Tax at 2.5% of the vehicle's value. The proposal has been dropped entirely.

In another critical amendment, the Finance Bill will no longer include a proposed 16% VAT on bread, a measure that sparked widespread criticism for its potential to increase the already high cost of living. The proposal to amend the Data Privacy Act and allow Kenya Revenue Authority (KRA) access to taxpayers' financial transactions was also dropped.

Also Read: Finance Bill 2024: Full Statement Announcing Amendments at State House PG

Similarly, excise duties on vegetable oil and VAT on transportation of sugar have been scrapped, addressing fears of inflationary pressures on essential commodities.

Furthermore, the Eco Levy on locally manufactured products has been removed, reflecting a shift towards supporting domestic industries without imposing additional costs.

Small businesses and farmers have reason to celebrate as well, with the exemption of those with turnovers below Ksh1 million from the controversial eTims system. This adjustment is seen as a positive step towards easing compliance requirements and fostering growth within the informal sector.

The government has introduced excise duties on imported table eggs, onions, and potatoes. This measure is intended to shield local farmers from unfair competition and bolster Kenya's food security initiatives.

The amended Finance Bill will also maintain current rates for mobile money transfers, dispelling concerns of increased transaction costs for mobile banking users. Additionally, VAT on financial services and foreign exchange transactions has been eliminated, promoting financial inclusivity and reducing transactional barriers.

The threshold for VAT registration has been raised from Ksh5 million to Ksh8 million. This adjustment aims to relieve administrative burdens on smaller businesses, allowing them to focus on growth and sustainability.

The proposal to introduce tax on sanitary pads and towels was also done away with in the amended Finance Bill of 2024.

Kuria noted that the government was keen on balancing fiscal prudence with social welfare, acknowledging the importance of responsive governance in meeting the needs of all Kenyans. The Molo MP emphasized ongoing efforts to fine-tune fiscal policies in consultation with stakeholders, ensuring that future measures align with economic realities and public expectations.

No items found.

Tony Mukere is the branded content lead at Money254. He is a trained journalist with a passion for impactful storytelling. Before joining Money254.co.ke, he worked as an editor at Kenyans.co.ke, and as a reporter at Pulselive.co.ke. Connect with Mukere on Twitter.

Get the Money254 App and don't miss out on the next article.

Join 1.5M Kenyans using Money254 to find better loans, savings accounts, and money tips today.

Get it on Google Play
A person holds the Money254 App in their hand.

Welcome to Money254 - your simple way to compare loans in Kenya online.

Money 254 is a new platform focused on helping you make more out of the money you have. We've created a simple, fast and secure way to find and compare financial products that best match your needs. All of the information shown is from products available at established financial institutions that our team of experts has tirelessly collected.

Download the new Money254 App and don’t miss out on the next article.

Join 1.5M Kenyans using Money254 to find better loans, savings accounts, and money tips today.
Get it on Google Play

Learn more about Personal Loans available in Kenya on Money254

Money 254 is a new platform focused on helping you make more out of the money you have. We've created a simple, fast and secure way to find and compare financial products that best match your needs. All of the information shown is from products available at established financial institutions that our team of experts has tirelessly collected.

Instantly search loan products from established providers in Kenya and compare on the terms that matter most to you.
Money254
Find the best Personal Loans for me

Don't miss another article - download the new Money254 App Today

Get it on Google Play
Download the Money254 app on Google Playstore

Sign up for our newsletter and get weekly money tips to your inbox.

Get updates from the Money254 team on financial news and new Money254 features.