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MPs To Consider Dropping Motor Vehicle Tax & 2 Others After Treasury Proposal

Per reports, the committee is also considering dropping the Eco Levy Tax and Excise Duty on bread and cooking oil, which had they gone through, would have put the cost of goods to be affected by the tax out of reach for many Kenyans.

The Parliamentary Budget Committee led by Molo Member of Parliament (MP) Kuria Kimani is considering doing away with the controversial Motor Vehicle Tax and two other tax proposals in the Finance Bill 2024.

Per reports, the committee is also considering dropping the Eco Levy Tax and Excise Duty on bread and cooking oil, which had they gone through, would have put the cost of goods to be affected by the tax out of reach for many Kenyans.

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According to some of the committee members who spoke to Citizen TV, the decision to do away with the taxes by MPs was informed by Kenyans unanimously rejecting them during public participation exercises across the country.

The MPs, currently in Naivasha for a retreat, noted that they will include the amendments in their report set to be presented before Parliament tomorrow, Tuesday, June 18.

Molo MP Kuria Kimani at a committee hearing on the Finance Bill 2024 on June 12, 2024. /KURIA KIMANI


Should the amendments be implemented, Kenyans will not be forced to pay a yearly tax for their motor vehicles or part with higher prices of basic commodities such as bread and vegetable oil, which would have caused a ripple effect on other products.

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The Motor Vehicle Tax was expected to target every Kenyan owning a car, with the proposal of a 2.5 per cent levy equivalent to the car’s value, with a minimum rate of Ksh5,000.

In the event the Eco Levy is thrown away, Kenyans will also be spared from paying more for commodities such as smartphones, loudspeakers, microphones, earphones, monitors, projectors, ATMs, calculating machines and cash registers.

Eco levy was going to affect manufacturers and importers in the country where the price would have been increased for the consumers. Other items targeted by the levy were batteries, plastic packing bags, and rubber tyres for vehicles, motorbikes and bicycles.

Despite the amendments that do away with the tax proposals, Kenyans are still opposed to the Finance Bill 2024 which saw the introduction of more taxes to increase the country’s revenue base, joined by leaders from the opposition who have vowed to reject the Finance Bill in totality.

A section of them is expected to hold peaceful demonstrations outside Parliament tomorrow (Tuesday, June 18) as the committee presents its report.

MPs allied to the ruling party such as Kikuyu MP Kimani Ichung’wah and his Kiharu counterpart Ndindi Nyoro had in separate events assured Kenyans that their views would be considered.

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

The proposed amendments come days after Treasury Cabinet Secretary (CS) Njuguna Ndung’u on Thursday, June 13 handed Kenyans a huge sigh of relief by proposing to retain the excise duty charged on telephone and internet data services which stands at 15 percent.

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“Currently, excise duty is 15% on the following; telephone, internet data services, fees charged on money transfer services by banks, fees charged on money transfers by agencies and other financial service providers.

“In the fees charged on cellular phone service providers…I propose to retain the excise duty rate of 15% on fees charged on money transfer services by cellular phone service providers to benefit the electronic payment ecosystem,” he stated while reading the 2024/2025 Budget in Parliament.

Treasury Cabinet Secretary Njuguna Ndung’u speaking before presenting the 2024/25 budget in Parliament on June 13, 2024. /NATIONAL TREASURY

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