The government plans to re-introduce the contentious eco-levy tax in its new revenue-raising proposals as it seeks to collect Sh150 billion more to plug into the deficit caused by the withdrawal of the Finance Bill 2024.
After giving signals on the possible return of some of the clauses in the controversial bill that was shot down by weeks of Gen-Z-led protests, the government is now in the final stages of crafting other tax-raising measures, through the Tax Amendment Bill, which has 47 clauses, and being processed for a fresh introduction to Parliament.
Speaking to Citizen TV on Sunday, Treasury CS John Mbadi disclosed that the controversial eco-levy will be among those clauses which will make a comeback.
However, “sensitive” items like sanitary towels will be excluded from the list.
“We have lined up 47 amendments among them the eco-levy. We will however remove the ban on sanitary pads and other sensitive items,” he said.
The announcement attracted negative sentiments online with Kenyans saying the Finance Bill 2024 was rejected because it was bad in its entirety.
The eco-levy, which was among the key subjects for the street protests, also saw rejection by multi-national companies, such as the American giant beverage manufacturer and distributor Coca-Cola, which was opposed to the 10 percent excise duty in the proposal.
The government also plans to tax-exempt some of the basic commodities like bread, in a move that it says will save an additional Sh70 billion.
“We have been paying Sh525 billion in tax refunds and some are fictitious… By tax-exempting bread, we will maintain the same but reduce government expenditure,” added Mbasi.
The chairperson of the National Assembly Finance Committee Kimani Kuria said “we are waiting for the treasury to bring those proposals so that we can begin.”
Mbadi also says a raft of changes at the Kenya Revenue Authority will be instituted which will also bring to the coffers, another Ksh.105 billion by “sealing all loopholes through automation of systems.”
The government is also targeting to collect more taxes by extending the tax amnesty period by six months, to allow more Kenyans to file their returns.
“Some people have been avoiding paying taxes because of the deadlines. we hope that we will have more people paying,” Mbadi said.
The ministry is now rushing against time, to have these tax measures in place by September 30.
President William Ruto had announced a Sh177 billion spending cut and Sh169 billion in additional borrowing to fill in the shortfalls from the Finance Bill 2024’s death.
The new measures the government says, will help pay teachers who have threatened to go on strike, pay security forces and help with university funding.
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