June 13, 2024
List Of Items Kenyans Will Pay More When Finance Bill 2024 is Signed

List Of Items Kenyans Will Pay More When Finance Bill 2024 is Signed

Kenyans continue to discuss the Finance Bill 2024, as President Ruto tries to add new taxes while increasing others in order to fund the 2024-2025 budget.

Kenyan manufacturers and the business community as a whole claim that additional levies such as the Eco Levy, as well as a change of the excise duty on manufacturing raw materials, will disproportionately harm Kenyan consumers.

The Association of Kenya Insurers has also expressed concern over the introduction of the Motor Vehicle Circulation Tax.

Following the introduction of new taxes in the Finance Bill 2024, as well as increases in some current levies, below is a list of products for which Kenyans will pay extra.

1. Plastic Household Items

The proposal to impose a 10% excise charge on plastic products will raise the price of plastic household items such as basins and mugs, which are used in the majority of Kenyan homes.

According to the Kenya Association of Manufacturers (KAM), the cost of a basin will rise from Ksh.110 to around Ksh.200 as a result of this plan, when combined with other fees such as the environmental levy.

2. Packing and Wrapping Materials

The law proposes imposing a new tax known as the eco-levy on certain commodities manufactured in Kenya or imported into Kenya that are assessed to have a detrimental environmental impact.

This provision will automatically increase the price of all plastic packaging materials, batteries, and hygiene goods.

In some cases, the increase in packing costs will be 100% if the cost of the raw material equals the proposed charge.

According to KAM, the charge will boost the cost of bar soap used for washing clothing, utensils, and bathing from Ksh 170 to around Ksh 270.

3. Airtime and Internet services.

In the proposed Finance Bill, the National Treasury proposes increasing the excise levy on telephone and internet data services from 15% to 20%.

As a result, Kenyans will have to delve deeper into their pockets to acquire phone and internet services.

4. Cooking oil

The proposed 25 per cent excise levy on vegetable oils will drive up the cost of cooking oil which remains an essential product.

This duty paired with the eco fee on plastic packaging would drive up the cost of cooking oil by much to 80 per cent.

5. Bread with margarine

The Kenya Association of Manufacturers predicted that bread, which utilizes cooking oil in the baking process, will rise from Ksh70 to Ksh80.

Additionally, margarine is anticipated to rocket up from Ksh160 to Ksh300 following the levy put on vegetable oils.

However, the projected hike in bread prices related to the implementation of Value Added tax has been subject to discussion since the President instructed it to remain exempt.  

6. High-volume alcohol products

The Finance Bill 2024 proposes a new system of computing excise on beer, wine, and spirits based on pure alcohol content, generally known as alcohol by volume (ABV), as opposed to the current method, which has a flat excise for all three types of alcoholic beverages.

This will result in price increases for alcoholic products with high alcohol content, such as vodka and whiskey.

7. Vehicle Maintenance and Insurance

The Finance Bill, 2024 has proposed a motor circulation tax set at 2.5 per cent of the vehicle value, limited to a maximum of Ksh100,000, with the minimum being Ksh5000.

If Finance Bill 2024 goes through parliament, insurance companies shall be collecting the tax alongside the car insurance fee.

The Association of Kenya Insurers has, however, warned that this fee will significantly increase the cost of motor insurance.

Vehicle maintenance is also likely to increase as rubber tires used in vehicles, motorcycles, and bicycles are charged under the Eco Levy Tax.

8. Smartphones and microphones

As a result of the Eco Levy, will apply to goods that contribute to noise, dirt, and air pollution, such as cellphones, loudspeakers, earphones, monitors, projectors, ATMs, calculating machines, and cash registers.

List Of Items Kenyans Will Pay More When Finance Bill 2024 is Signed

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