Finance Bill 2024: Govt Drops Key Tax Proposals Including 16% VAT on Bread

Finance Bill 2024: Govt Drops Key Tax Proposals Including 16% VAT on Bread

The Kenyan Parliament's Departmental Committee on Finance and National Planning has recommended the removal of several significant tax proposals from the Finance Bill 2024. Key measures, including a proposed 2.5% tax on motor vehicles and a 16% VAT on ordinary bread, were discarded. The decision to eliminate these taxes was based on concerns about their potential impact on the cost of living and economic stability. The committee's recommendations aim to protect local industries, promote economic growth, and alleviate the financial burden on citizens.

Additional tax proposals that were removed include VAT on the transportation of sugar, excise duty on edible oil, and an eco-levy on locally manufactured products such as sanitary towels, diapers, and motorcycles. Levies on the Housing Fund and Social Health Insurance will now be income tax deductible. These decisions followed public consultation and deliberation within the ruling Kenya Kwanza government, which emphasized addressing public concerns and reducing the financial strain on Kenyans.

The Finance Bill 2024 will now proceed to the National Assembly, where MPs will vote on its final content. The removal of these controversial tax proposals reflects a broader effort by the government to balance revenue generation with economic and social considerations, responding to both public sentiment and the need for economic stability.


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