In a groundbreaking turn of events, significant amendments have been announced to the Finance Bill 2024, marking a pivotal moment in Kenya’s financial landscape. The dynamic changes unveiled by the authorities showcase a shift towards a more inclusive and supportive economic framework.
Firstly, the contentious proposal of imposing a 16% VAT on bread has been decisively scrapped, providing relief to consumers across the nation. Furthermore, the plan to increase taxation on mobile phone transfers has been abandoned, along with the rejection of additional taxes on bank transfers, easing the financial burden on the populace.
In a move aimed at bolstering local industries, all domestically manufactured goods, including essential items like diapers and sanitary pads, are set to be exempt from the Eco Levy, fostering growth and sustainability within the country’s production sector.
Moreover, adjustments to the Turnover Tax system are on the horizon, with the VAT threshold poised to rise from 5 million to 8 million. Small and medium enterprises (SMEs) with turnovers below 8 million will be spared from mandatory VAT registration, fostering a more conducive environment for business development.
The introduction of eTIMS will see businesses with turnovers below 1 million, such as small-scale avocado farmers, being exempted from registration, promoting ease of operations for budding entrepreneurs.
In a bid to support local farmers, excise duty will now solely apply to imported table eggs, onions, and potatoes, safeguarding the interests of domestic agricultural producers.
Additionally, a transformative shift in alcohol taxation is imminent, transitioning from volume-based to alcohol content-based levies. Manufacturers of high-alcohol content beverages will face increased duties, aligning taxation with product potency.
The revision of pension regulations signals a positive stride towards financial security, with the allowable tax exemption for pension contributions set to rise from 20,000 to 30,000 per month, providing enhanced benefits for retirees.
Furthermore, a landmark decision has been made to formalize the employment status of 46,000 Junior Secondary School (JSS) teachers on permanent and pensionable terms, with an additional 20,000 educators set to be recruited, fortifying the education sector.
In a move welcomed by motorists, the imposition of Motor Vehicle Tax has been revoked, easing financial pressures on vehicle owners. Additionally, VAT on transporting sugarcane from farms to milling factories has been eliminated, offering support to sugarcane farmers and streamlining the agricultural supply chain.
These sweeping changes herald a new era of economic resilience and prosperity, underlining a commitment to fostering growth, sustainability, and inclusivity in Kenya’s financial landscape. Stay tuned for more updates as this transformative journey unfolds.
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