Business Daily Africa’s Post

#Editorial The Power of popular resistance President William Ruto of Kenya recently introduced a series of fiscal reforms aimed at increasing the nation’s revenue to tackle its growing fiscal challenges. These reforms, encapsulated in a Finance Bill proposing a new tax regime, have sparked significant unrest throughout the country. The proposed Bill has been dropped, primarily due to the nationwide protests it triggered, which threatened the stability of both the country and the government. Kenya is grappling with a daunting debt burden of $80 billion, which necessitates using more than half of its annual tax revenue for debt servicing. In response, the administration proposed increasing the Value Added Tax (VAT) to 16%, a move that would have spiked the costs of essential commodities like bread and sugar. Additionally, the fiscal proposal included hikes in excise duty on vegetable oil, a 2.5% motor vehicle tax, and an eco-levy on locally manufactured goods such as sanitary pads. Read More 👉 https://lnkd.in/d5wExTuY

Kenya’s Treasury has cut its tax revenue target for the next financial year by Sh334 billion and reduced spending, reflecting a reluctance to raise taxes amid public discontent. The revised target is Sh2.96 trillion, down from Sh3.294 trillion, following protests that led to the withdrawal of the Finance Bill 2024, which had proposed tax increases. #kenya #treasury #taxcuts #revenuetarget #tradearlnews

In Kenya, whether you’re an individual or a company, selling personal assets such as land or a car 🚘 that were acquired under your Personal Identification Number (PIN) means you're required to pay Capital Gains Tax (CGT) on any profit made from the sale. The tax rate is 15% on the net gain, and it's essential to declare these gains to the #KRA and make timely payments to avoid penalties 💸. Understanding your tax obligations 🤔 is key when selling personal assets. Remember, CGT applies to the net profit from the sale, no matter if you're a company or an individual. And don’t forget, CGT is paid as final tax — no further tax obligations on that gain once paid! ✅ #TaxCompliance #CapitalGainsTax #KRA #KenyaTax #TaxTips #FinancialAwareness #BusinessTips #Kenya #TaxEducation #TaxMatters #PersonalFinance

The prospects of adjusting tax effective rates in SSA to raise more revenue domestically in the immediate future have become increasingly unlikely in part due to the recent social unrest in response to proposed higher taxes in Kenya in May and to a reduction of subsidies in Nigeria in August. See my blog post with Victoria Diamond on this subject here https://https://lnkd.in/gkT9PEz4

FINANCE BILL 2024 The proposals in the Bill can be seen to target an increased tax base and enhancing revenue collection. These include the proposed 1.Introduction of the Significant Economic Presence Tax 2. Motor Vehicle Tax. 3. Proposed increase in the rates of excise duty on data, money transfer services, and betting and gaming activities. 4.Introduction Advance Pricing Agreements into the transfer pricing regime 5. Repealing various tax exemptions, including income tax exemptions on infrastructure bonds, as well as Value Added Tax (VAT) exemptions on various financial services and sector-specific exemptions that are currently in place in the tourism, health and e-mobility sectors. What potential impact will it have to businesses in Kenya, And will the government be able to achieve their tax collection targets Give your views #FinanceBill2024 #KenyaTaxes

I was on CNN this evening speaking about the wave of protests that have rocked Kenya this week dubbed #RejectFinanceBill2024 as citizens demand the government shelves the ambitious 2024/25 revenue raising plan seeking to mobilise an additional Kes 346.7 billion (US$2.69 billion) worth of tax revenue. Unlike preceding Finance Bills, the 2024 version seems to have stepped on a live wire with ordinary citizens since it makes a considerable leaning towards indirect taxes with relatively aggressive clean up of the first & second schedules of the Value Added Tax (VAT) Act looking to trim the tax expenditure attributable to exempt & zero rates products. Whilst we saw equally heated debate regarding Finance Bill/Act 2023, it was heavily anchored on direct taxes & therefore constrained its reach mainly to the few Kenyans who are privileged to have payslip. The controversial Finance Bill 2024 this afternoon sailed through the National Assembly's second reading with 204 legislators voting in its favour versus 115 who were against it. Next, it proceeds to the Committee of the Whole House where there's clause by clause amendment.

The Finance Bill 2024, recently passed by Kenya's Parliament, is set to introduce higher taxes on essentials, imported goods, and digital services. Despite some rollbacks due to public backlash, critics warn that the new taxes will further increase the cost of living. Discover how this legislation is impacting Kenyans and the growing public dissent towards President Ruto's administration. #Kenya #EconomicPolicy #PublicProtests https://lnkd.in/ezek4CdJ

In a statement, Kenya Bankers Association Acting CEO Raimond Molenje has urged the Government to: 1. Prioritize consultation and stakeholder engagement, including with the banking industry in deliberating on tax measures. 2. Reassess tax measures on financial services, including VAT and Excise Duty, to prevent excessively burdening the Kenyan Public and avoid adverse effects on economic growth and competitiveness. 3. Ensure consistent Tax Policy, which is vital for providing stability and predictability to businesses and individuals. 4. Address the cost of compliance by providing clarity on implementation adequate time to modify systems for compliance. #FinanceBill2024

Many thanks Adediran Adeyemi for capturing this well especially the impact on the people however, it could have some medium to long term positive impact such as: >>>Encouragement of investment in public transport* The introduction of the tax will likely encourage investment in elaborate public transport, which has been lacking in Kenya. This is because the tax will make it more expensive for people to use their cars, making public transport a more attractive option. >>>Cleaner & sustainable environment *: The tax will likely lead to an increase in the use of alternative modes of transport, such as walking, cycling, and using public transport. This will reduce the number of cars on the road, which will in turn reduce traffic congestion and pollution. >>>Job creation in the transport sector! Increased investment in public transportation system could have a significant effect on employment in that sector. We saw the visible impact of the fuel subsidy removal in cities like Lagos where hitherto to the removal, traffic congestion exert a great deal of hardship on the people. We saw some families put over 3 cars on the road daily: one for Oga , another for madam and lastly for kids commuting to school. With the subsidy removal , such households were forced to adjust. Though the average #kenyan will feel the impact of the #tax but the long term benefits may well exceed the momentary cost. #Tax #Kenya #governmentpolicy

"If you don’t want to pay the Motor Vehicle Circulation Tax, don’t use your car." These were the words of MP Kurai Kimani as Kenya proposes a 2.5% annual tax on the value of motor vehicles in its 2024 Finance Bill. With a maximum deduction of Sh100,000, this amount is payable annually when issuing an insurance cover. In disclosures to the IMF, the Treasury revealed plans for new taxes as part of a contingency plan to fund the country’s budget. Kenya’s current debt stands at approximately Ksh11.14 trillion (about $76.83 billion) as at April 2024. Countries typically fund their budgets through three main sources: loans, taxation, and non-tax revenues. Loans can be effective if invested in projects that stimulate the economy and generate enough returns to repay the debt. However, when loans fail to pay for themselves, the burden falls on tax revenues, potentially forcing the government to increase taxes. Consequently, if loans do not self-finance, the citizens end up bearing the cost. They may be forced to walk to work and leave their cars at home, as MP Kurai Kimani suggested. Something has to give. #taxation, #internationaltax