Key Changes in the Amended Kenyan Finance Bill 2024

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The Kenyan Finance Bill 2024 has been amended to better reflect public input and concerns. Here's a simple breakdown of what these changes mean for everyday Kenyans:

Major Tax Adjustments

1. No VAT on Essential Goods

The 16% Value Added Tax (VAT) on bread, sugar transportation, financial services, and foreign exchange transactions has been removed. This means these items and services will not become more expensive.

2. Motor Vehicle Tax

The proposed 2.5% tax on motor vehicles has been scrapped. This will help keep car prices from rising too much.

3. No Extra Charges on Mobile Money Transfers

There will be no increase in fees for transferring money via mobile services like M-Pesa. This is good news for everyone who uses mobile money for daily transactions.

Support for Local Businesses and Farmers

4. Eco Levy

The Eco Levy will only apply to imported finished products that contribute to e-waste. Locally made products like sanitary towels, diapers, phones, computers, tires, and motorcycles will not attract this levy. This is aimed at encouraging the use of local products and reducing environmental harm from imported goods.

5. VAT Threshold

The threshold for registering for VAT has been increased from KSh5 million to KSh8 million. This means smaller businesses with annual sales below KSh8 million won't have to register for VAT, reducing their administrative burden.

6. Protecting Local Farmers

Excise duty will be placed on imported table eggs, onions, and potatoes to protect local farmers from cheap imports. This should help local farmers sell more of their produce at better prices.

Benefits for Employees and Pensioners

7. Pension Contributions

The amount exempt from tax for pension contributions will increase from KSh20,000 to KSh30,000 per month. This allows workers to save more for retirement without being taxed on those savings.

8. Housing and Health Levies

Levies on the Housing Fund and Social Health Insurance will not attract income tax. This means more of your income goes directly to these funds rather than being taxed first.

Education and Employment Initiatives

9. Funding for Education

The government has allocated KSh18 billion for hiring Junior Secondary teachers and an additional KSh20 billion for hiring 20,000 interns. This investment in education aims to improve the quality of learning and provide more job opportunities.

Conclusion

These changes reflect the government's response to public concerns, aiming to make life more affordable and support local businesses and farmers. The amendments are designed to ease the financial burden on Kenyans while promoting economic growth. Well, it can be interpreted in many ways. A lot has not been touched on in this article. Wholesome amendments still need to be made to the original draft.

**Rodgers Munene**​​

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