Molo Member of Parliament Kimani Kuria has announced that the government has removed the 16 percent VAT tax on bread.
While briefing the press after the Kenya Kwanza Parliamentary Group meeting at State House on June 18, Kuria said that the proposed eco levy will only be chargeable to imported finished products to make them marketable and become a manufacturing country.
“We have listened to the view Kenyans in the form of public participation and there are two things we must do. 16 percent on vat on bread has been dropped and we have proposed that we do not have any increase on taxation on mobile phone transfer,” Kuria said.
“We all agree that environmental conservation is a key concern, and that is why eco levy was introduced but imposing this on the locally manufactured goods will increase the cost in the country and stand a risk of making them not competitive in East Africa market and Africa.”
All locally manufactured products including the Diapers, Sanitary towel, phones, computers, Tyres, wheelchairs, wheelchairs, tuktuks and motorcycles, will not attract the Eco Levy will not be subject to the levy.
The 2.5 percent motor vehicle tax amended under the income tax act has been removed.
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Other Tax Proposals Removed from the Finance Bill
On the VAT threshold, the government proposed and increase in the VAT threshold from Ksh 5 million to Ksh 8 million and therefore means that many small businesses with turnover less than Ksh8 million will no longer need to register for VAT.
Responsibility for electronic invoicing ETIMS, recently introduced by KRA, has been withdrawn from farmers and small businesses including mama mboga’s especially those with a turnover of below Ksh. 1 million.
Furthermore, excise duty has been imposed on imported table eggs, onions and potatoes to protect local farmers and make them more marketable.
The excise duty on alcoholic beverages will now be taxed on the basis of alcohol content and not volume. That means that the higher the alcohol content the more excise duty it will attract. Consequently, alcohol manufacturers are expected to make safer and cheaper alcohol.
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Additionally, the pension contributions exemption will increase from Ksh. 20,000 per month to Ksh. 30,000. Also Read:
The government has also removed VAT on the transportation of sugarcane from the farm to the milling factories.
On transport side, only excise duty will be imposed on the imported motorcycles.
The parliamentary Group 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 into permanent and pensionable.
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.
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