Kenya faces tighter financial constraints with the unveiling of the Finance Bill 2024, a hefty 135-page dossier outlining measures aimed at bolstering revenue streams for the forthcoming fiscal year of 2024/2025.
Among the contentious proposals drawing mixed reactions is the introduction of a 16% VAT on bread, potentially hiking prices by a minimum of Ksh10 for a standard 400-gram loaf. Ordinary bread may lose its VAT-exempt status, stirring debate both online and offline.
Additionally, vehicle owners brace for increased financial burdens, with an annual tax of up to Ksh100,000 looming, contingent on car value. This levy, dubbed the motor vehicle tax, could add strain amid rising fuel and spare part costs.
Imported motorcycles valued at Ksh130,000 and above face a potential price surge, with proposed excise duty revisions posing accessibility challenges, particularly for models with engine capacities exceeding 100 cc.
Gamblers, too, are not spared, as the Treasury eyes a hike in excise tax on betting stakes to 20%, up from the current 12.5%. Mobile money transfer fees and financial services face increased excise duties and VAT, further impacting consumer pockets.
In a rare reprieve, beer aficionados may rejoice as the Treasury proposes a reduction in excise duty on 500-ml bottles with 4.2% alcohol content, potentially lowering prices.
These fiscal adjustments stem from concerns over revenue shortfalls, with the Kenya Revenue Authority’s (KRA) underperformance prompting revisions to both revenue and expenditure targets.
As the bill awaits Cabinet endorsement before facing Parliamentary scrutiny, Kenyans brace for potential shifts in their financial landscapes, with implications reverberating across various sectors of the economy.
