Taxes MPs approved in amendments to finance bill

Economy

Taxes MPs approved in amendments to finance bill


Legislators at the Parliament Buildings. PICTURES | JEFF ANGOTE | NMG

President Uhuru Kenyatta is expected to sign the Finance Bill 2022 after lawmakers approved fiscal measures to boost the budget by 3.3 trillion shillings.

The Treasury, through the Finance Bill, seeks to generate at least 51.6 billion shillings of revenue to fund the budget for the fiscal year beginning July 1.

The National Assembly has been suspended for an indefinite period (Sine Die) pending the August 9 general elections. This means that President Kenyatta can only approve a series of amendments to the bill.

The Treasury is seeking to raise funds to fill a budget gap of 846 billion shillings. MPs amended the bill to reduce taxes on staples like maize, wheat and cassava flour.

The Treasury had proposed removing items from the tax exemption list, a move that will have raised the price of maize, wheat and cassava or meslin flour and maize flour containing cassava flour by more 10% by weight.

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The Finance and National Planning Commission chaired by Gladys Wanga amended the bill to reduce the value added tax on liquefied petroleum gas (LPG) from 16% to 8%.

MPs rejected a proposal to waive excise duty on imported fertilized poultry eggs in a bid to protect local poultry farmers and individuals with local hatcheries.

The House rejected a proposal to levy excise duty on motorcycles which would have raised prices to 13,403.64 shillings per unit from the current 12,185.16 shillings.

The Treasury’s attempt to impose a 10% excise duty on bottled or similarly packaged waters and other soft drinks was also defeated.

MPs reduced the excise rate for fruit juices, including grape must and vegetable juices, unfermented and with no added alcohol to 13 shillings a litre.

They also excluded excise duty on locally produced chocolate products – white chocolate, chocolate in blocks, slabs or bars.

The House rejected the Treasury’s proposal that people with tax disputes with the Kenya Revenue Authority deposit 50% of the disputed amount before filing an appeal in the High Court.

The excise duty on capital gains tax (CGT) has been maintained at 15%, as proposed by the Treasury.

Lawmakers have further dropped the Treasury’s proposal to raise excise duties on beer, arguing that it will drive drunks towards illicit beers. But they voted to raise the rate of excise duty on wines and spirits withheld to Sh208.20 per litre.

MPs, however, voted to increase excise duty on fees charged by digital lenders to a rate of 20%.

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Lawmakers also set the excise duty on the import of mobile phone SIM cards at 10% of the excise value to protect local manufacturers.

MEPs accepted the Treasury’s proposal fixing the rate of excise duty at 15% to discourage counterfeiting.

Lawmakers also raised the excise duty on jewelry to 15% from the current 10%.

They have also increased excise duties on fees charged on advertisements by television and radio stations, print media on forms of betting and gambling from 15% to 20%.

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