Kenya Kwanza government has finally bowed to pressure and dropped taxes on basics commodities and services.This follows a Kenya Kwanza Parliamentary Group meeting held earlier today at State House chaired by President William Ruto
According to The Finance Committee of the National Assembly , following public participation sessions held last week, the committee resolved to remove 16 per cent VAT on bread removed as well as scrapping VAT on transportation of sugar .
VAT on financial services and foreign exchange transactions has also been remove and there will be No increase on mobile money transfer charges.
The controversial motor vehicle circulation 2.5 per cent Tax has also been removed as well as Excise duty on vegetable oil removed
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, while Eco Levy will only be levied on imported finished products and not on locally manufactured products which is expected assembly will help boost Kenya’s manufacturing capacity, create jobs and save foreign exchange.
Consequently, locally manufactured products, including sanitary towels, diapers, phones, computers, tyres and motor cycles, will not attract the Eco Levy.
The threshold for VAT registration has been increased from KSh5 million to KSh8 million. This therefore means that many small businesses will no longer need to register for VAT while Responsibility for electronic invoicing ETIMS, recently introduced by KRA, has been receded from farmers and small businesses with a turnover of below Ksh. 1 million and Excise duty imposed on imported table eggs, onions and potatoes to protect local farmers.
Excise duty on alcoholic beverages will now be taxed on the basis of alcohol content and not volume. The higher the alcohol content the more excise duty it will attract. Consequently, alcohol manufacturers are expected to make safer and cheaper alcohol, while at the same time Pension contributions will enjoy an exemption ranging from Ksh. 20,000 per month to Ksh. 30,000
In Education sector KSh18 billion will be provided for the employment of all 46,000 Junior Secondary teachers who are on internship contracts. Extra 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.
