Distress for Kenyans as President signs Finance Bill into Law
Anon  |  Sep 24, 2018
       


The contentious Finance Bill 2018 was signed into law by President Uhuru Kenyatta. The new law has major implications for Kenyans who will now grapple with a heavier tax burden but is set to increase government revenue by 130 billion shillings. Below is a breakdown of these implications:

  1. Deletion of Clause 18(b) of the Finance Bill which sought to postpone the imposition of VAT on fuel by another 2 years. In its place, VAT Act 2013 was amended to reduce the VAT charge on fuel to 8% upon the enactment of the supplementary Appropriation Act. This is projected to raise 17.5 billion shillings in revenue
  2. Imposition of a 15% excise duty on telephone and internet data service as well as a 20% excise charge on money transfer services by banks, agencies and other financial services providers. These would replace the more expensive and complicated Robin Hood Tax and is projected to generate 20.2 billion shillings that will be channelled to finance universal health care
  3. A further reduction in taxation on winnings under the Betting, Lotteries and gaming Act to 15%, which is expected to have a net effect of encouraging players to continue betting on local platforms. The National Treasury expects to raise revenue to an estimated 24-30 billion shillings
  4. An amendment to the Employment Act that will see employees contribute 1.5% of their monthly basic salary, matched by employers but not exceeding Kshs 5,000 monthly, payable to the National Housing Development Fund. The introduction of the contributory scheme is meant to support the housing pillar under the government’s Big 4 Agenda
  5. An amendment to the Miscellaneous Fees and Levies Act to provide for the an anti-adulteration levy on kerosene at the rate of 18 shillings per litre of the customs value of kerosene payable by the importer at the time of entry. This is in a bid to harmonize the prices of kerosene and diesel thus eliminating fuel adulteration that has led to pollution, damage to vehicle engines as well as adversely affecting government’s revenue.



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