The Finance Bill 2024 continues to generate debate from Kenyans as President Ruto seeks to introduce new taxes while increasing some to finance the 2024-2025 budget.
Kenyan manufacturers and the business community at large claim some of the new taxes like the Eco Levy, and a revision of the excise duty on manufacturing raw materials will hurt Kenyan consumers more.
The Association of Kenya Insurers has also raised concerns about the introduction of the Motor Vehicle Circulation tax.
Following the introduction of new taxes in the Finance Bill 2024 and an increase in some already existing taxes, here is a list of products that Kenyans will have to pay more for.
- Plastic Household Items
The proposal to introduce a 10 percent excise duty on plastic products will increase the cost of plastic household products like basins and mugs used in most Kenyan homes.
In a statement issued by the Kenya Association of Manufacturers (KAM), the cost of a basin will increase from Ksh.110 up to approximately Ksh.200 due to this proposal combined with other levies such as eco levy.
2. Packaging and Wrapping Materials
The bill has proposed the introduction of a new tax referred to as the eco-levy on selected goods manufactured in Kenya or imported into Kenya that are deemed to negatively affect the environment.
Under this provision, it will automatically lead to a price increase on all plastic packaging materials, batteries, and hygiene products.
In certain instances, the increase in packaging costs will increase by 100 per cent in cases where the cost of the raw material is equal to the proposed levy.
KAM attributes that the levy will see bar soap used for washing clothing, utensils, and bathing increase from Ksh 170 to approximately Ksh 270 as a result.
3. Airtime and Internet Services.
In the proposed Finance Bill, the National Treasury has proposed a hike in excise duty charged on telephone and internet data services from 15 per cent to 20 per cent.
Consequently, Kenyans will be forced to dig deeper into their pockets to access call and internet services.
4. Cooking Oil
The proposed 25 per cent excise duty on vegetable oils will drive up the cost of cooking oil which remains an essential commodity.
This excise combined with the eco levy on plastic packaging will drive up the cost of cooking oil by up to 80 per cent.
5. Bread and Margarine
The Kenya Association of Manufacturers projected that bread, which uses cooking oil during the baking process, will increase from Ksh70 to Ksh80.
Additionally, margarine is estimated to shoot up from Ksh160 to Ksh300 following the levy introduced on vegetable oils.
However, the proposed increment in bread prices owing to the introduction of Value Added tax has been subject to debate as the President instructed it remains exempted.
6. High Volume Alcoholic Products
The Finance Bill 2024 proposes a new method of calculating excise on beer, wine and spirits based on pure alcohol content also known as alcohol by volume (ABV)- unlike the present method which has a flat excise for each of the three types of alcoholic drinks.
This will see the prices of alcoholic products high in alcohol volume such as vodka and whiskey experience a spike in price.
7. Motor Vehicle Maintenance and Insurance
The Finance Bill, 2024 has introduced a motor circulation tax set at 2.5 per cent of the vehicle value, capped at a maximum of Ksh100,000, with the minimum being Ksh5000.
If Finance Bill 2024 sails through parliament, insurance companies shall be collecting the tax alongside the motor insurance fee.
The Association of Kenya Insurers has however warned that this tax will notably increase the cost of motor insurance.
Vehicle maintenance is also expected to shoot up as rubber tyres used in vehicles, motorcycles, and bicycles will also be levied under the Eco Levy Tax.
8. Smartphones and Microphones.
As a result of the Eco Levy which will be imposed on goods that contribute to noise, soil and air pollution e.g. smartphones, Loudspeakers, earphones, monitors, projectors, ATMS, calculating machines, and cash registers.
