William Ruto makes major U-turn on major tax proposals


• The Ruto team said the proposals were dropped following a public participation exercise that saw Kenyans raise opposition against them.

President William Ruto
Image: Courtesy

The Kenya Kwanza Government has responded to public outcry by abandoning several contentious tax proposals:

President William Ruto had convened a parliamentary group meeting at State House, Nairobi, resulting in the decision.

Following robust public opposition, National Assembly Finance Committee Chair Kuria Kimani stressed the importance of protecting Kenyans from rising living costs.

Dropped proposals include taxes on bread, motor vehicles, and eco-tax, along with excise duty on vegetable oil.

The existing 15% tax on mobile service transfers remains unchanged.

Taxes on locally manufactured diapers and sanitary pads have also been scrapped.

Eco Levy will only apply to imported finished goods, promoting local manufacturing to enhance capacity, create jobs, and save foreign exchange.

The VAT registration threshold has been raised from Sh5 million to Sh8 million, benefiting many small businesses.

Responsibility for electronic invoicing ETIMS has been relieved from farmers and small businesses with turnovers below Sh1 million.

Excise duty has been introduced on imported table eggs, onions, and potatoes to safeguard local farmers.

Excise duty on alcoholic beverages will now be based on alcohol content rather than volume, encouraging safer and more affordable production.

The monthly exemption for pension contributions has been raised from Sh20,000 to Sh30,000.

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