National Assembly Finance Chair Kuria Kimani revealed that his committee had noted some ambiguities in the Finance Bill 2024.
Speaking during the ongoing public participation, the MP noted that the ambiguities had led to several misinterpretations of the clauses in the bill, hence posing litigation risks.
As an example, he cited the clause on the 16 per cent VAT for finance services which people had misinterpreted to be on the value of transactions rather than on fees charged for transactions.
Therefore, Kimani detailed that the committee would be undertaking amendments to address all the loopholes that can be used to challenge the Finance Bill.
“We acknowledge that there are a few provisions that are not clear on the Bill which we need to clean up. I also wish to clarify that the proposed imposition of VAT is on the fee charged on the foreign exchange transaction, rather than on the value of the foreign exchange," he stated.
The Finance Bill sets out various tax measures aimed at financing the budget. Therefore, sections of the Bill immediately come into effect from July 1, 2024.
Therefore, should anyone challenge the Finance Bill in court, various government agencies find difficulties in implementing the tax measures.
This scenario was witnessed with the Finance Act 2023 when some of the courts suspended the Bill. This led to confusion on the release of pump prices for July 2023.
On the other hand, the committee also assured Kenyans that it would consider all the proposals made by stakeholders.
It was noted that the impacts of the tax proposals on Kenyans would be a major priority that will influence the amendments to be made during its passage in parliament.
“We are on serious business here. We’re not engaged in a public relations exercise. While it is in order for you to urge us to protect Kenyans from punitive tax measures, I want to assure you that we will consider all your proposals and make amendments to the Bill where necessary,” the committee's vice chairperson Benjamin Langat remarked.
Some of the tax proposals that have been opposed include the 2.5 per cent motor vehicle tax, the new Eco Levy of commodities such as diapers and the VAT on financial services offered by banks.
