Kenya’s controversial finance bill that has attracted a new wave of protests in the country will affect the economy largely due to its direct taxes, experts opine.
Image courtesy of ReutersAccording to local reports, the government said it was dropping some direct-to-consumer measures amid a public outcry and ongoing protests calling for a total rejection of the Kenya Finance Bill 2024.
Some of the controversial provisions initially put forward included a plan to introduce a 16% sales tax on bread and 25% duty on cooking oil. There was also a planned increase in the tax on financial transactions as well as a new annual tax on vehicle ownership amounting to 2.5% of the value of the vehicle.
But according to Raimond Molenje, the acting CEO of the Kenya Bankers Association, the increased taxation on businesses means the environment will still be harsh for the ordinary citizen of Kenya.
“Most of the proposals in the Finance Bill 2024 are indirect taxes. Taxes on business which ultimately move to the final consumer,” Raimond Molenje, Acting CEO, Kenya Bankers Association (KBA), said recently.
“The transaction costs are going up significantly, from 15% to 40%. People will start looking for other options of moving out of the financial ecosystem.”
KENYA FINANCE BILL 2024 |
“Most of the proposals in the Finance Bill 2024 are indirect taxes. Taxes on business which ultimately move to the final consumer.
The transaction costs are going up significantly, from 15% to 40%. People will start looking for other options of moving… pic.twitter.com/Rnhq0wXbeb
— BitKE (@BitcoinKE) June 25, 2024
For example, according to the ride-hailing sector, the implementation of the Significant Economic Presence Tax (SEP), the motor vehicle tax, and the tax on batteries will cost about 50, 000 jobs. That’s before the additional proposal to raise the road maintenance levy on fuel, just a year after the Finance Act 2023 raised VAT to 16% and with it took fuel prices to unprecedented highs.
“The government is shooting themselves in the foot because they increase the tax to increase their revenue. This will reduce the revenue that is already generated by ride-hailing companies,” says George Abasy, the Public Policy Manager at Bolt.
Follow us on Twitter for the latest posts and updates
Join and interact with our Telegram community
________________________________________
________________________________________
