Motor Vehicle Tax Removed, Excise Levy on Edible Oil Dropped as MPs Respond to Public Outcry on Finance Bill 2024

Molo MP Kuria Kimani at a committee hearing on the Finance Bill 2024 on June 4, 2024.
Molo MP Kuria Kimani at a committee hearing on the Finance Bill 2024 on June 4, 2024.
Parliament of Kenya

The Kenya Kwanza Parliamentary Group proposed several amendments to the Finance Bill of 2024/2025 during a press briefing on Tuesday morning, following their meeting at State House.

Speaking after the Group’s session, Finance Committee Chair Kimani Kuria announced that the government had responded to public feedback by reducing proposed taxes.

Kuria clarified that the proposed Eco Levy would only apply to imported finished products, exempting those manufactured within Kenya. He further specified that diapers and sanitary towels produced domestically would not be subject to this levy.

"It is crucial to point out that Eco Levy is being levied on imported finished products. Locally manufactured products will, therefore, not attract the Eco Levy. Locally assembly and manufacturing will help boost Kenya's manufacturing capacity, create jobs and save foreign exchange," read the proposed report in part.

Sifa Pad & Praise Project in Kajiado County
Sifa Pad & Praise Project sanitary pads factory in Kajiado County, that was launched on Thursday, February 9, 2023.
Facebook/Mama Rachel

The boda boda sector is also set to score a win with the government clarifying that there will be exemptions of taxes on motor cycle tyres as well as those of bicycles, wheel chairs and wheelbarrows.

In a move to ease the burden of the rising cost of living, the committee also confirmed the removal of the proposed increase in tax on mobile transactions from the bill.

Further, the proposed VAT on financial services and foreign exchange transactions has also been removed.

Moreover, the Kenya Kwanza Parliamentary Group decided that the government would abandon contentious taxes aimed at increasing VAT on bread by 16 per cent.

Later today, Parliament will receive a report that excludes the controversial motor vehicle circulation tax.

Within the report, the Committee disclosed that the proposed Motor Vehicle Tax is levied on an asset and not income within the definition hence prompting its deletion.

Additionally, the committee denoted that the proposal to cap the levy at one hundred thousand shillings makes the tax discriminatory and non-progressive.

Another tax which the government plans to reduce are the proposed taxes which would affect cooking oil to ensure affordability for Kenyans.

While announcing the new proposed Finance Bill 2024 ammendments, the Kenya Kwanza Government was keen to elaborate that the proposals had been implemented to boost the growth of the Kenyan manufacturing sector.

President William Ruto addressing Kenya Kwanza MPs on June 18, 2024.
President William Ruto addressing Kenya Kwanza MPs at State House on June 18, 2024.