Nairobi — President William Ruto has signed into law the Finance Bill that was approved by the National Assembly last week.
Officials said he signed the Bill into law on Monday morning at State House, Nairobi.
“President William Ruto has assented to the Finance Bill,” State House Press Secretary Emmanuel Talam said.
The controversial Bill was passed during a stormy session largely boycotted by the Opposition.
Following the passage, President Ruto has affirmed that the tax bill will enable his administration to deliver on their manifesto pledge to Kenyans and cut on huge dependence on external debt.
The Finance Bill seeks to raise additional revenue in taxes in the region of Ksh130 billion to finance the Kenya Kwanza administration’s Ksh3.6 trillion budget for the 2023/24 financial year.
Among the key contentious issues in the Bill include the housing levy, which was amended to 1.5 percent of gross pay from the initial 3 percent.
Employers are required to remit 1.5 percent housing levy deducted from employees to the government in nine days to fund affordable housing scheme.
Employers will also be required to remit their top-up within the same period within nine days failure to which they face a penalty equivalent to two percent of the unpaid funds for every month the same remain unpaid.
With the bill victory, Kenyans are set to brace themselves for high cost living following the increase on Value Added Tax (VAT) on petroleum products from 8 to 16 per cent.
This will result in an increase of over Sh12 per litre of diesel and super petrol. It could see super petrol increase to around Sh200 a litre.
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Bus fares as well as commercial vehicle fares are set to increase which will raise transport costs for commuters and the cost of production for those in the logistics sector.
The Energy and Petroleum Regulatory Authority (Epra) is expected to announce higher fuel prices following the assent of the bill.
The income earned through digital content monetization will be subjected to a 5 percent withholding tax, which matches with the percentage rate for other professional services.
The bill defines content creators as any individual that is offering “entertainment, social, literal, artistic, educational or any other material electronically,” through websites, and social media platforms like Facebook, Twitter, or Instagram, in partnership with brands or retailers.
Content creators had faulted the William Ruto-led government’s plan to increase the tax to 15 percent saying it will stifle the creative’s industry.
Opposition leader Raila Odinga has vowed to lead mass protests after a public rally in Kamukunji set for Tuesday.
Speaking during a press conference on Thursday, June 22, 2023, Martha Karua and other Azimio leaders invited Kenyans to a consultation at the Kamukunji Grounds on Tuesday, June 27, 2023.
Azimio Coalition has expressed readiness to partner with civil society in pushing for their agenda for the sake of Kenyans who are suffering once he jets back to the country.
The Odinga-led coalition had suspended the weekly protest to give dialogue a chance through a 14-member bi-partisan team who fail to reach a consensus on sticky issues.
