Economy

Taxes MPs approved in changes to Finance Bill

parliament

Parliament in session. FILE PHOTO | JEFF ANGOTE | NMG

President Uhuru Kenyatta is expected to sign the Finance Bill 2022 after lawmakers approved tax measures aimed at raising the Sh3.3 trillion budget.

The Treasury, through the Finance Bill, seeks to generate at least Sh51.6 billion in revenue to finance the budget for the financial year starting July 1.

The National Assembly went on an indefinite recess (Sine Die) pending the August 9 General Election. This means President Kenyatta can only approve a raft of amendments to the Bill.

The Treasury is seeking to raise funding to plug a Sh846 billion budget deficit. MPs amended the Bill to reduce taxes on basic commodities like maize, wheat and cassava flour.

The Treasury had proposed to remove the items from the tax-exempt list, a move that will have increased the price of maize, wheat and cassava or meslin flour and maize flour containing cassava flour by more than 10 percent in weight.

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The Finance and National Planning Committee chaired by Gladys Wanga amended the Bill to cut value-added tax on liquid petroleum gas (LPG) from 16 percent to eight percent.

MPs rejected a proposal to exempt excise duty on imported fertilised poultry eggs in a move meant to protect local poultry farmers and individuals with local hatcheries.

The House rejected a proposal to charge excise duty on motorcycles that would have pushed prices up Sh13,403.64 per unit, up from the current Sh12,185.16.

Also rejected was the Treasury’s attempt to impose 10 percent excise duty on bottled or similarly packaged waters and other non-alcoholic beverages.

The MPs reduced excise rate for fruit juices including grape must and vegetable juices, unfermented and not containing added spirit to Sh13 a litre.

They also excluded the excise duty on locally manufactured chocolate products- white chocolate, chocolate in blocks, slabs or bars.

The House rejected the Treasury’s proposal to have individuals with tax disputes with the Kenya Revenue Authority deposit 50 percent of the disputed amount before filing an appeal in High Court.

Excise duty on Capital Gains Tax (CGT) was retained at 15 percent as proposed by the Treasury.

The legislators further dropped the Treasury’s proposal to increase excise duty on beer arguing it will push drunkards to illicit brews. But they voted to increase the rate of excise duty on wines and spirits retained at Sh208.20 per litre.

The MPs however voted to increase excise duty on fees charged by digital lenders to a rate of 20 per cent.

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Lawmakers also set excise duty on the importation of cellular phone SIM cards at 10 per cent of the excisable value to protect local manufacturers.

The MPs retained the Treasury’s proposal setting the rate of excise duty at 15 per cent to discourage counterfeits.

The lawmakers also raised excise duty on Jewellery to 15 per cent from 10 per cent currently.

They also increased excise duty on fees charged on advertisements by TV and radio stations, print media on forms of betting and gaming from 15 to 20 percent.

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