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Finance Bill, 2024: Finance Committee mulls scrapping Motor Vehicle Tax, excise duty on bread

Treasury Cabinet Secretary Njuguna Ndung’u presenting the 2024/2025 budget in Parliament on June 13, 2024. (X/National Assembly)

By Erick Kariuki | Monday, June 17, 2024

MPs from the ruling Kenya Kwanza administration have assured Kenyans that their opinions would be taken into account.

The National Assembly's Finance and National Planning Committee is considering removing the controversial Motor Vehicle Tax in the Finance Bill, 2024.

The committee chaired by Molo MP Kimani Kuria is also said to be considering doing away with the eco levy, excise duty on bread and vegetable oil, and taxes on money transfers and internet services.

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The increased taxes in the Finance Bill 2024 were introduced to boost the country's revenue but have faced strong opposition from Kenyans and a section of leaders.

Some members of the committee who spoke to Citizen TV said that MPs were considering the changes after Kenyans unanimously rejected the proposed taxes during the public participation exercise that was carried out across the country.

The MPs who are currently in Naivasha are set to present their recommendations including the amendments proposed by Kenyans before Parliament on Tuesday.

National Assembly Finance and National Planning Committee Chairman Kimani Kuria. (Photo: X/Kimani Kuria)

Bread is currently on a list of zero-rated items that include flour, milk and sanitary products.

A 16 per cent VAT will attract a hike in bread price by Sh10. According to the Institute of Certified Public Accountants of Kenya (ICPAK), the VAT will hit those with the least capacity to pay more.

MPs from the ruling Kenya Kwanza administration have assured Kenyans that their opinions would be taken into account.

"I want to assure all Kenyans who have given their views that as leaders, we respect them," the Budget and Appropriation Committee chair Ndindi Nyoro stated.

Kenya Association of Manufacturers (KAM) together with the Association of Edible Oil Manufacturers, have opposed the 25 per cent tax being imposed on crude palm oil and finished cooking oil.

KAM said that the 10 per cent excise on plastic packaging and Sh150 per kilogramme eco-levy will raise the retail cost of a litre of cooking oil by Sh168 to an average of Sh468 per litre.

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