KENYANS DECRY HIGH TAXES IN PROPOSED FINANCE BILL 2024

The Finance Bill 2024 in Kenya has sparked significant controversy due to its extensive tax reforms aimed at boosting government revenue. Key aspects of the bill have drawn criticism for potentially overburdening citizens and businesses.

One of the major concerns is the introduction of new taxes and the increase of existing ones. The bill proposes a 2.5% motor vehicle tax, increased withholding tax rates for goods supplied to public entities, and a significant economic presence tax for non-resident digital businesses. The latter would see foreign digital businesses taxed at 20% of their gross turnover, while Kenyan digital businesses would face a 5% tax.

The bill also aims to remove several VAT exemptions on essential services, including financial services such as credit and debit card issuance and money transfers, which will now attract a 16% VAT. This move is expected to increase the cost of financial transactions significantly.

Additionally, the proposed bill includes an eco-levy on certain electronics and a controversial annual tax on car values, bundled with insurance premiums. The removal of VAT exemptions on basic items like bread has further fueled public discontent, as it could lead to higher costs of living amid stagnant wages and inflation.

The public has been invited to submit comments on the bill before its potential enactment in June, highlighting the ongoing debate and the critical need for a balanced approach to fiscal policy.