Breathing Easier: The Government’s Tax Proposals Bring Relief

In a move that has been widely welcomed, the Government has removed several contentious tax proposals from the Finance Bill 2024. This decision has brought a collective sigh of relief for businesses and individuals across the country.

Easing the Burden on Essentials

The government has made significant strides in reducing the tax burden on essential commodities. The highly debated 16% VAT on bread has been removed, providing much-needed relief for families and households. Additionally, the excise duty on vegetable oil has been scrapped, a move that will directly benefit consumers.

Boosting Mobility and Local Production

The government has also taken steps to alleviate the tax burden on transportation and local manufacturing. The VAT on the transportation of sugar has been removed, making it more affordable for businesses and individuals to move this vital commodity. Furthermore, the Eco Levy on locally manufactured products has been eliminated, encouraging the growth and development of domestic industries.

Supporting Small Businesses and Agriculture

One of the most significant changes is the receding of the eTims system from farmers and small businesses with a turnover of below Ksh.1 million. This move will significantly ease the administrative burden on these enterprises, allowing them to focus on their core operations. Additionally, the government has imposed an excise duty on imported table eggs, onions, and potatoes, aiming to protect the livelihoods of local farmers.

Relieving the Financial Sector

The government has also taken steps to alleviate the tax burden on the financial sector. The VAT on financial services and foreign exchange transactions has been removed, providing a much-needed boost to the industry. Furthermore, the threshold for VAT registration has been increased from KSh5 million to KSh8 million, meaning that many small businesses will no longer be required to register for VAT.

The government’s decision to remove these contentious tax proposals from the Finance Bill 2024 is a clear demonstration of its commitment to supporting businesses, individuals, and the overall economic well-being of the country. The changes outlined in this blog post are expected to have a positive impact on a wide range of sectors, from essential commodities to small businesses and the financial industry. This move is a welcomed step towards creating a more favorable and sustainable economic environment for all Kenyans.