Kenya’s President William Ruto has announced changes to the controversial Finance Bill that has sparked protests in the nation’s capital.
Ruto and Finance Committee Chairman Kimani Kuria explained to MPs and Senators the changes made to the bill at the State House in Nairobi on Tuesday.
Ruto said the changes have taken into account the views of the people and other stakeholders during public participation sessions.
“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,” Ruto said.
What has changed?
The Finance Bill has been amended to remove the proposed 16 percent VAT on bread, transportation of sugar, financial services, foreign exchange transactions, and the 2.5 percent motor vehicle tax.
Ruto added that there will be no increase in mobile money transfer fees, and the excise duty on vegetable oil has also been removed.
Levies on the Housing Fund and the proposed one on Social Health Insurance will also not attract income tax.
“The proposed Eco Levy will only be imposed on imported finished products that contribute to e-waste and thus harm the environment when they are no longer in use,” Ruto said.
Eco Levy changes
Consequently, locally manufactured products, including sanitary towels, diapers, phones, computers, tyres, and motorcycles, will not attract the Eco Levy.
The President stressed that 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 the Eco Levy will be imposed on imported finished products, while those locally manufactured are exempt.
It means locally manufactured products, including sanitary towels, diapers, phones, computers, tyres, and motorcycles, will not attract the Eco Levy.
VAT registration
The threshold for VAT registration has also been increased from KSh5 million to KSh8 million, meaning that many small businesses will no longer need to register for VAT.
The government also announced that the electronic invoicing system ETIMS, recently introduced by the Kenya Revenue Authority, has been rescinded for farmers and small businesses with a turnover of below KSh1 million.
President Ruto said the Executive and the Legislature will continue to work together “in making the right decisions for the country.”
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