- The National Finance Committee on Finance has retained tax increment proposal in some key sectors whose ripple effect will land on ordinary citizens.
- Top on the list is increase of road maintance levy from Sh18 to Sh25, representing a 39 per cent increase.
Image: PCS
While a section of Kenyans could have taken refuge in the major tax proposals dropped by President William Ruto's adminstration on Tuesday, tough times loom in some sectors.
The National Assembly Finance Committee has retained tax increment proposals in some key sectors whose ripple effect will land on ordinary citizens.
Top on the list is an increase in road maintenance levy from Sh18 to Sh25.
The increase in levy followed a recommendation by Transport CS Kipchumba Murkomen who said the increase will help raise its collection to Sh115 billion, from Sh84 billion currently collected.
While appearing before the Finance Committee to give views on the Finance Bill 2024, Murkomen listed the increased challenges in road maintenance as justification for the proposal.
“Delayed maintenance is adversely impacting road conditions, a pattern that is projected to accelerate unless resolved,” Murkomen said.
“In 2016 when the fuel levy charge was last adjusted, the length of paved roads nationally was 16,600 kilometres. In 2024, the length of paved roads has increased to 25,411 kilometres.”
National Assembly Finance Committee Chair Kuria Kimani said the amount collected from the levy will help in maintaining and repairing the roads.
Additionally, Kenyans importing products will feel a pinch as the Finance Committee retained a proposal to increase the Import Declaration Fee (IDF) from 2.5 per cent to 3.5 per cent.
With many products, including basic ones such as food and clothing, being imported, the increase will trickle down to Kenyan citizens who will have to pay more to access the goods.
The IDF was dropped to 2.5 per cent in the 2023/24 financial year, from 3 per cent charged in the 2022/23 financial.
The committee attributed the increase to a bid to recover Sh10 billion lost due to the reduction of the IDF from 3 per cent to 2.5 per cent.
"The proposed increase of aIDF to 3.5 per cent would therefore help to restore the performance of this tax head in line with projected budget estimates for 2025/25 Financial Year," Kimani said.
The Kimani-led committee also retained the eco levy tax on imported finished products. This will affect imported products such as sanitary towels and pads.
The committee also dealt a blow to importers of eggs, onions and potatoes where it recommended an imposition of excise duties.
With prices of onions currently hitting a record high in the market, the excise duty will leave the prices of the commodity beyond the reach of ordinary citizens.
The committee has equally proposed an increase in Road Development Levy (RDL) that is currently at 2.5 per cent.
This, the committee said, said the amount collected would go towards the development of an electric light rail system.
The committee has also proposed an increase in excise duty charged on betting to boost revenue.
A similar proposal has been made on the importation of the export and investment Promotion Levy on leather products, ceramic sinks, wash basins, imported footwear and denatured ethyl alcohol.