- Despite protests in the chamber and in the precincts, the lawmakers retained the contentious eco levy, dropping some radical proposals
- MPs reduced rates for eco levy to Sh150 per unit for an array of imported goods from the initial Sh225
Image: EZEKIEL AMING'A
Members of Parliament on Tuesday passed the contentious tax law before protesters overrun security and left a trail of destruction.
At least 195 MPs voted to approve the Bill in a heated session while 106 said "No" to the proposals deemed punitive. Three votes were spoilt.
About 10 Azimio lawmakers dropped their amendments saying it will mean endorsing the controversial tax proposals.
Despite protests in the chamber and in the precincts, the lawmakers retained the contentious eco levy, dropping some radical proposals.
MPs reduced rates for eco levy to Sh150 per unit for an array of imported goods from the initial Sh225.
Items such as office machines, calculators, data processing machines, smart-phones, telephone sets and data cables are tipped for a raise.
“The purpose of the levy shall be to ensure that the importers of the goods specified in the Fourth Schedule pay for the negative environmental impacts of the goods,” the bill reads.
To address concerns that the money will not be used prudently, the House voted for the levy to be paid into a fund.
“The levy shall be paid into the Restoration Fund established under the Environmental Management and Coordination Act,” the new proposal says.
MPs said the Cabinet Secretary will make regulations for better implementation of the provisions of the section.
The House however exempted products such as tyres for motorbikes, bicycles, ambulance, tuk tuks, and sanitary items.
“This is to safeguard sanitary hygiene and since we have no capacity to produce our own, diapers and sanitary towels be exempt from eco-levy,” said Finance Committee chairman Kuria Kimani.
Locally manufactured mosquito repellent, tea packaging material, vapour used on stoves and materials for production of transformers and transformer parts have been zero rated.
Lawmakers also voted to increase the import declaration fees increased to 2.5 per cent from the current 1.5 per cent. The bill had proposed to set it at three per cent.
The National Assembly also removed taxes touching on bread, locally assembled electric vehicles and other packaging materials.
“No taxes will be charged on any type of bread. We have zero rated materials used to make bio-degradable sanitary towels and diapers as well as exempted from taxation, sanitary towels and diapers,” Kimani said.
The bill as approved has now zero rated local manufacture of fertiliser, tea packaging materials, mosquito repellents, local assembly of mobile phones and raw material used in the making of electric motorcycles.
The MPs also voted to remove the proposed increase on excise on financial transactions including foreign exchange.
Alcohol will now attract duty based on content with MPs also approving taxes on cigarettes [with or without filters].
The House also approved the deletion of proposed excise duty on vegetable oil saying the aim is to keep cost of living low.
MPs voted to remove subsistence farmers and MSMEs protected from requirement of e-tims. They will now be required to submit tax invoice.
The House passed a section which introduces the requirement that those working outside the country for Kenyan firms have KRA pins.
MPs also approved the proposal to increase the tax amnesty by one year to June 30, 2025, amid indications that those who were forgiven have paid more than Sh31 billion out of the Sh42 billion owed.
The house also deleted a clause that sought to remove reliefs on affordable housing on grounds it is yet to take root.
Manufacturers were also saved from the provision for excise duty to be paid within 24 hours; the same will be paid every 5th of a new month.
“It proved impractically especially for alcoholic beverages manufacturers. The amendment releases working capital for manufacturers,” Kimani said.