Govt to Reintroduce Some Clauses in the Rejected Finance Bill 2024

The government is set to bring back some clauses that were contained in the Finance Bill of 2024 which was last month withdrawn from Parliament and all its clauses deleted via an order from President William Ruto. 

Treasury Cabinet Secretary John Mbadi announced that the introduction of some of the laws proposed by the Finance Bill 2024 would be helpful in helping the government address its revenue challenges. 

Some of the provisions that the new CS described as progressive include the proposal to extend the tax amnesty programme as well as another clause in the Finance Bill that sought to reduce the government’s tax expenditure. 

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The tax amnesty programme spares a taxpayer from interests and penalties by giving them a chance to pay all the principal taxes that were due by that date. 

The Finance Bill 2024 had proposed an extension to March 2025 from the end of June 2024 when it expired. The programme saw the government collect Ksh43.9 billion in the financial year that ended June 2024.

The Finance Bill 2024 also set to reduce the government's tax expenditures including tax refunds of zero-rated items from the 16% Value added tax (VAT). 

Tax exempt items are more expensive than zero- rated items because firms cannot claim the input taxes and hence pass it on to consumers.

Mbadi added that, under his reign at the National Treasury, he would ensure that public participation was always undertaken before the introduction of new policies. He added that the re- introduction of the Finance Bill in its entirety would be an abuse to the people of Kenya.

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“I will just mention those two( reducing tax expenditures and extension of tax amnesty). But I know our team around here is working on some of those proposals that were in the Finance Bill 2024 which we can now put together and see how to take them back to parliament, not as Finance Bill but as other proposals,” the CS announced. 

The move comes after the government suffered the loss of two Finance Bills that are critical in raising government revenues. The Court of Appeal on 31st July 2024 declared the Finance Act 2023 null and void and unconstitutional. 

This was weeks later after the Finance Bill 2024 was withdrawn by the President on June 26th 2024 after public demonstrations against the contentious bill.This means that the government’s revenue raising measures are mainly supported by the Finance Act of 2022. 

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