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 several 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 domestically produced diapers and sanitary towels would not be subject to this levy.
"It is crucial to point out that the Eco Levy is being levied on imported finished products. Locally manufactured products will, therefore, not attract the Eco Levy. Local assembly and manufacturing will help boost Kenya's manufacturing capacity, create jobs, and save foreign exchange," the proposed report stated.
The boda boda sector is also set to benefit, with the government exempting taxes on motorcycle tires as well as those for bicycles, wheelchairs, and wheelbarrows.
To ease the burden of the rising cost of living, the committee confirmed the removal of the proposed increase in tax on mobile transactions from the bill.
Additionally, the proposed VAT on financial services and foreign exchange transactions has been removed.
The Kenya Kwanza Parliamentary Group also decided that the government would abandon the contentious proposal to increase VAT on bread by 16%.
Later today, Parliament will receive a report excluding the controversial motor vehicle circulation tax. The committee disclosed that the proposed Motor Vehicle Tax is levied on an asset and not income, prompting its deletion. The proposal to cap the levy at one hundred thousand shillings was also deemed discriminatory and non-progressive.
The government also plans to reduce proposed taxes on cooking oil to ensure affordability for Kenyans.
While announcing the new amendments to the Finance Bill 2024, the Kenya Kwanza Government emphasized that the proposals were implemented to boost the growth of the Kenyan manufacturing sector.