The government is a step away from enforcing tax measures in the Finance Bill 2024 that would generate extra revenue it needs to support the KSh3.9 trillion 2024/25 budget, despite ongoing street protests that have resulted in tens of deaths and hundreds of injuries.
- This is after majority of House members voted to pass the controversial Bill which has been challenged across the country by not only the youth but also a section of business community.
- The uproar generated from the new tax generation measures has seen the government-aligned leaders amend the bill throwing out a number of tax suggestions.
- Finance Committee Chairman Kimani Kuria says the Bill has been amended to remove the proposed 16 per cent VAT on bread, transportation of sugar, financial services, foreign exchange transactions as well as the 2.5 per cent Motor Vehicle Tax.
Additionally, there will be no increase in mobile money transfer fees, and Excise Duty on vegetable oil has also been removed.
Levies on the Housing Fund and the proposed one on Social Health Insurance will not attract income tax, putting much more money in the pockets of employees.
The proposed Eco Levy will only be imposed on imported finished products that contribute to e-waste and thus harm the environment when they are no longer in use.
“Consequently, locally manufactured products, including sanitary towels, diapers, phones, computers, tyres and motorcycles will not attract the Eco Levy,” said Kimani.
How Parliament Voted
Lawmakers leaning on the opposition side rooted for total rejection of the bill with majority withdrawing amendments suggestion. However, despite the rejection from the opposition, the bill passed the Second Reading with 195 MPs voting for its adoption with the amendments while 106 legislatures giving it thump down, 3 votes were spoilt.
The Bill will now proceed to the Third Reading before being taken to President William Ruto for assent before July 1 when the next Financial Year commences.
The adoption of Finance Bill 2024 with its amendments elicited organic protest across Kenya’s major towns, widely powered by the youth. Businesses bore the brunt of the demos as shops remained closed for the entire day leading to revenue loses running into millions.
In Nairobi, the protests which began as peaceful in the morning, turned out to be ugly in the afternoon, following attempt by the demonstrators to access Parliament building where the MPs voted yes to approve the Bill.
The protesters in their thousands stormed the Parliament, burning part of the building as MPs flee to more secure areas. Several protesters died from the incident.
In his address to the nation, President William Ruto termed the Tuesday event unfortunate, blaming criminals for infiltrating the peaceful demonstrations. He termed the events an attack on democracy, rule of law and the integrity of Kenya’s constitutional institutions.
“An otherwise legitimate expression of the fundamental rights and freedom of assembly, demonstration, picketing and petitioning of public authorities, by a section of law-abiding citizens was infiltrated and hijacked by a group of organized criminals,” noted Ruto.
“I assure the nation, that the government has mobilized all resources at nation’s disposal to ensure that a situation of this nature, will not recur again, at whatever cost,” he said directing all organs of Kenya’s national security to deploy all measures to thwart any attempts of dangerous criminals to undermine the security and stability of the country.
A joint statement by ambassadors and high commissioners condemned the use of live fire during the demonstrations calling on the actors to respect, uphold, promote and fulfil the principles of democracy and the rule of law, particularly by ensuring a proportionate security response.
“We are deeply concerned by the violence witnessed in many parts of the country during the recent protests, and especially shocked by the scenes witnessed outside the Parliament. We welcome civic engagement by all Kenyans, in particular the youth, in addressing issues of vital public concern,” reads the statement signed by the diplomats from 13 countries.
Wading on the Tuesday incident, Kenya’s fourth President Uhuru Kenyatta called on leaders to listen to the protester’s grievances noting that the constitution provided for demonstration. “Leaders must know that power and authority they have is donated to them by the people. I call for calm and for leadership to show restraint and do the right thing by listening to the people. Violence on either side is not the answer,” he said.
Secretary General of the United Nations, Antonio Guterres also urged the Kenyan authorities to exercise restraint, and call for all demonstrations to take place peacefully.
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