The Finance Bill 2024 (the Bill) was introduced to the National Assembly on 9th May 2024. Below are the key proposed changes.
Amending status of various supplies
The Bill proposes to amend the VAT status of the following products from exempt to taxable:
|
Description |
Current status |
Proposed rate |
|
8802.30.00 Airplanes and other aircraft of an unladen weight exceeding 2,000 kg but not exceeding 15,000 kg |
Exempt |
16% |
|
8802.60.00 Spacecraft (including satellites) and suborbital and spacecraft launch vehicles |
Exempt |
16% |
|
Gluten bread |
Exempt |
16% |
|
Unleavened bread |
Exempt |
16% |
|
Taxable supplies (goods & services) imported or purchased locally for use by the local film producers and local filming agents, upon recommendation by the Kenya Film Commission |
Exempt |
16% |
|
Direction-finding compasses, instruments and appliances for aircraft |
Exempt |
16% |
|
Taxable supplies (goods & services) for direct and exclusive use for the construction of tourism facilities, recreational parks of fifty acres or more, convention and conference facilities upon recommendation by the Cabinet Secretary responsible for matters relating to recreational parks |
Exempt |
16% |
|
Taxable goods and services for the direct and exclusive use in the construction and equipping of specialized hospitals with a minimum bed capacity of 50, approved by the Cabinet Secretary upon recommendation by the Cabinet Secretary responsible for health who may issue guidelines for determining eligibility for the exemption |
Exempt |
16% |
|
Pressure-sensitive adhesive of tariff number 3506.91.00 |
Exempt |
16% |
|
Plain polythene film/LPDE of tariff number 3921.19.10 |
Exempt |
16% |
|
PE white 25-40gsm/release paper of tariff number 4811.49.00 |
Exempt |
16% |
|
ADL 25-40gsm of tariff number 5603.11.00 |
Exempt |
16% |
|
Specially designed locally assembled motor vehicles for transportation of tourists, purchased before clearance through Customs by tour operators upon recommendation by the competent authority responsible for tourism promotion |
Exempt |
16% |
|
Plant, machinery and equipment used in the construction of a plastics recycling plant. |
Exempt |
16% |
|
Musical instruments and other musical equipment, imported or purchased locally, for exclusive use by educational institutions, upon recommendation by the Cabinet Secretary responsible for education |
Exempt |
16% |
|
Such capital goods the exemption of which the Cabinet Secretary may determine to promote investment in the manufacturing sector, provided that the value of the investment is not less than KES 2b |
Exempt |
16% |
|
Betting, gaming and lotteries services |
Exempt |
16% |
|
Hiring, leasing and chartering of aircrafts excluding helicopters of tariff numbers 8802.11.00 and 8802.12.00 |
Exempt |
16% |
|
The VAT status of the following financial services has been proposed by the bill to change from exempt to standard rate supplies:
|
Exempt |
16% |
The Bill proposes to amend the VAT status of the following goods/services from Taxable (16%) to Exempt:
|
Description |
Current rate |
Proposed rate |
|
All goods including material supplies, equipment, machinery and motor vehicles, for official use by National Intelligence Service |
16% |
Exempt |
|
Inputs and raw materials used in the manufacture of mosquito repellent on recommendation by the Cabinet Secretary responsible for matters relating to health |
16% |
Exempt |
|
Mosquito repellent |
16% |
Exempt |
|
Tea packaging material |
16% |
Exempt |
|
Micronutrients, foliar feeds and bio-stimulants of Chapter 38 |
16% |
Exempt |
|
Transfer of business as a going concern |
16% |
Exempt |
The Bill proposes to amend the VAT status of the following products from zero-rated (0%) to Exempt:
|
Description |
Current rate |
Proposed rate |
|
The supply of motorcycles of tariff heading 8711.60.00 |
0% |
Exempt |
|
All inputs and raw materials whether produced locally or imported, supplied to manufacturers of agricultural pest control products upon recommendation by the Cabinet Secretary for the time being responsible for agriculture |
0% |
Exempt |
|
Agricultural pest control products |
0% |
Exempt |
|
Bioethanol vapor (BEV) Stoves classified under HS Code 7321.12.00 (Cooking appliances and plate warmers for liquid fuel) |
0% |
Exempt |
The Bill proposes to amend the VAT status of the following products from zero-rated (0%) to standard rated (16%):
|
Description |
Current rate |
Proposed rate |
|
Transportation of sugarcane from farms to milling factories. |
0% |
16% |
|
The supply of ordinary bread |
0% |
16% |
|
Inbound international sea freight offered by a registered person |
0% |
16% |
|
The supply of locally assembled and manufactured mobile phones |
0% |
16% |
|
The supply of electric bicycles |
0% |
16% |
|
The supply of solar and lithium-ion batteries. |
0% |
16% |
|
The supply of electric buses of tariff heading 87.02. |
0% |
16% |
Revised excise duty rates: Goods
|
Excisable goods |
||
|
Item |
Current excise tax |
Proposed excise tax |
|
Imported sugar confectionary |
KES 42.91 per kg |
KES 257.55 per kg |
|
Wines, fortified wines, and other fermented alcoholic beverages** |
KES 243.43 |
KES 22.50 per centiliter of pure alcohol |
|
Beer, Cider, Perry, Mead, Opaque beer and mixtures** |
KES 142.44 per liter |
KES 22.50 per centiliter of pure alcohol |
|
Spirits of undenatured ethyl alcohol, spirits liqueurs and other spirituous beverages** |
KES 356.42 per liter |
KES 16 per centiliter of pure alcohol |
|
Cigarette with filters (hinge lid and soft cap) |
KES 4,067.03 per mille |
KES 4,100 per mille |
|
Cigarettes without filters (plain cigarettes) |
KES 2,926.41 per mille |
KES 4,100 per mille |
|
Products containing nicotine or nicotine substitutes |
KES 1,595.00 per mille |
KES 2,000 per kg |
|
Liquid nicotine for electronic cigarettes |
KES 70 per milliliter |
KES 100 per milliliter |
|
Vegetable oils of tariff codes 1511, 1512, 1515 and 1517 |
25% |
|
** Effective 1 September 2024
Revised excise duty rates: Services
|
PART II — Excisable services |
||
|
Excisable service |
Current excise tax |
Proposed excise tax |
|
Telephone and internet data services |
15% |
20% |
|
Fees charged for money transfer services by banks, money transfer agencies and other financial service providers. |
15% |
20% |
|
Fees charged for money transfer services by cellular phone service providers, |
15% |
15% |
|
Betting |
12.5% |
20% |
|
Gaming |
12.5% |
20% |
|
Price competition amount paid or charged to participate in a prize competition |
12.5% |
20% |
|
Lottery (excluding charitable lotteries) on the amount paid or charged to buy the lottery ticket |
12.5% |
20% |
Goods subject to eco levy. The table below sets out the various rates:
|
# |
Item description |
Tariff code |
Proposed eco levy rate (KES per unit) |
|
1 |
Automatic data processing machines and units thereof of Heading 8471, except storage units of tariff 8471.70.00 |
8471 |
225 |
|
2 |
Calculating machines and pocketsize data recording, reproducing and displaying machines with calculating functions; accounting machines, postage-franking machines, ticket-issuing machines, and similar machines, incorporating a calculating device; cash registers — incorporating a printing device |
8470.21.00 |
225 |
|
3 |
Other office machines (e.g., hectograph or stencil duplicating machines, addressing machines, automatic banknote dispensers, coin-sorting machines, coin-counting or wrapping machines, pencil-sharpening machines, perforating or stapling machines) |
8472.90.00 |
98 |
|
4 |
Other office machines (e.g., hectograph or stencil duplicating machines, addressing machines, automatic banknote dispensers, coin-sorting machines, coin-counting or wrapping machines, pencil-sharpening machines, perforating or stapling machines) |
8472.90.00 |
225 |
|
5 |
Parts and accessories (other than covers, carrying cases and the like) suitable for use solely or principally with machines of headings 84.70 to 84.72; parts and accessories of automatic data processing machines and units thereof |
8473.30.00 |
98 |
|
6 |
Line telephone sets with cordless handsets |
8517.11.00 |
225 |
|
7 |
Smartphones |
8517.13.00 |
225 |
|
8 |
Other telephones for cellular or wireless networks |
8517.14.00 |
225 |
|
9 |
Other telephone sets |
8517.18.00 |
225 |
|
10 |
Base stations |
8517.61.00 |
225 |
|
11 |
Machines for the reception, conversion and transmission or regeneration of voice, images or other data, including switching and routing apparatus |
8517.62.00 |
225 |
|
12 |
Other apparatus for transmission or reception of voice, images or other data, including apparatus for communication in a wired or wireless network |
8517.69.00 |
225 |
|
13 |
Microphones and stands thereof |
8518.10.00 |
98 |
|
14 |
Sound recording or reproducing apparatus-using magnetic, optical or semiconductor media |
8519.81.00 |
98 |
|
15 |
Radio navigational aid apparatus |
8526.91.00 |
98 |
|
16 |
Reception apparatus for radiobroadcasting, whether or not combined, in the same housing, with sound recording or reproducing apparatus or a clock of Heading 8527 |
8527.12.00 |
225 |
|
17 |
Reception apparatus for television not designed to incorporate a video display or screen |
8528.71.00 |
1275 |
|
18 |
Unassembled color television sets |
8528.72.10 |
1275 |
|
19 |
Unassembled monochrome television sets |
8528.73.10 |
1275 |
|
20 |
Assembled monochrome television sets |
8528.73.90 |
1275 |
|
21 |
Color cathode ray television tubes |
8540.11.00 |
1800 |
|
22 |
Monochrome cathode ray television tubes |
8540.12.00 |
1800 |
|
23 |
Television camera tubes; image converters and intensifiers; other photo-cathode tubes |
8540.20.00 |
1800 |
|
24 |
Other instruments and apparatus, specially designed for telecommunications (for example, crosstalk meters, gain measuring instruments, distortion factor meters, psophometers) |
9030.40.00 |
98 |
|
25 |
Plastic packaging materials of Chapter 39 |
Chapter 39 |
150 per kg |
|
26 |
Rubber tires of Chapter 40 |
Chapter 40 |
1000 |
|
27 |
Batteries or dry cells of Chapter 85 |
Chapter 85 |
750 per kg |
|
28 |
Diapers of Chapter 96 |
Chapter 96 |
150 per kg |
|
29 |
Transmission apparatus for radiobroadcasting or television, whether or not incorporating reception apparatus or sound recording or reproducing apparatus; television cameras, digital cameras and video camera recorders of heading 8525 |
Heading 8525 |
98 |
The Finance Act, 2023 introduced the Export and Investment Promotion Levy (EIPL) on select goods imported into the country for home use.
The proposed rates are described the table below:
|
# |
Tariff number |
Item description |
Current rate |
Proposed rate (% of customs value) |
|
1 |
0401.20.00 |
Milk and cream of a fat content by weight, exceeding 1% but not exceeding 6% |
– |
3% |
|
2 |
2207.20.00 |
Denatured ethyl alcohol and other spirits |
– |
3% |
|
3 |
2208.40.00 |
Rum and other spirits obtained by distilling fermented sugar |
– |
3% |
|
4 |
2208.60.00 |
Vodka |
– |
3% |
|
5 |
2523.10.00 |
Cement clinker |
17.50% |
10% |
|
6 |
3401.30.00 |
Organic surface-active products and preparations for washing the skin |
– |
3% |
|
7 |
4804.11.00 |
Unbleached kraft liner |
10% |
3% |
|
8 |
4804.29.00 |
Uncoated kraft paper and paperboard, in rolls or sheets other than that of heading 4802 or 4803 — other sack kraft paper |
10% |
3% |
|
9 |
4819.30.00 |
Sacks and bags with a base width of 40 cm or more |
10% |
Deleted |
|
10 |
4819.40.00 |
Other sacks and bags, including cones |
10% |
Deleted |
|
11 |
7207.11.00 |
Semi-finished products of iron or non-alloy steel containing, by weight, measuring less than 14mm in diameter and the cross section measuring less than 8 mm |
17.50% |
Deleted |
|
12 |
7207.11.00 |
Billets |
– |
10% |
|
13 |
7213.91.90 |
Bars and rods of iron or non-alloy steel, hot rolled, in irregularly wound coils of circular cross-section measuring less than 14mm in diameter |
17.50% |
Deleted |
|
14 |
7321.12.00 |
Cooking stoves for liquid fuel |
– |
3% |
|
15 |
8711.10.90 |
Motorcycles with internal combustion engine not exceeding 50cc |
– |
3% |
|
16 |
8711.20.10 |
Motorcycles with internal combustion engine exceeding 50cc but not exceeding 250cc |
– |
3% |
|
17 |
8711.20.90 |
Motorcycles with internal combustion engine exceeding 50cc but not exceeding 250cc |
– |
3% |
|
18 |
8711.30.90 |
Motorcycles with internal combustion engine exceeding 250cc but not exceeding 500cc |
– |
3% |
|
19 |
8711.40.90 |
Motorcycles with internal combustion engine exceeding 500cc but not exceeding 800cc |
– |
3% |
|
20 |
8711.50.90 |
Motorcycles with internal combustion engine exceeding 800cc |
– |
3% |
|
21 |
8711.60.00 |
Electric motorcycles |
– |
3% |
|
22 |
9403.10.00 |
Metal furniture of a kind used in offices |
– |
3% |
|
23 |
9403.20.00 |
Other metal furniture |
– |
3% |
|
24 |
9403.30.00 |
Wooden furniture for office |
– |
3% |
|
25 |
9403.40.00 |
Wooden furniture for kitchen |
– |
3% |
|
26 |
9403.50.00 |
Wooden furniture for bedrooms |
– |
3% |
|
27 |
9403.60.00 |
Other wooden furniture |
– |
3% |
|
28 |
9403.70.00 |
Furniture of plastics |
– |
3% |
|
29 |
9403.82.00 |
Furniture of bamboo |
– |
3% |
|
30 |
9403.83.00 |
Furniture of rattan |
– |
3% |
|
31 |
9403.89.00 |
Furniture of cane, osier or similar material |
– |
3% |
|
32 |
9403.91.00 |
Parts of furniture, not of wood |
– |
3% |
|
33 |
9403.99.00 |
Parts of furniture, not of wood |
– |
3% |
|
34 |
9404.10.00 |
Mattress supports |
– |
3% |
|
35 |
Chapter 42 |
Articles of leather of Chapter 42 |
– |
20% |
|
36 |
Chapter 64 |
Imported footwear of Chapter 64 |
– |
20% |
|
37 |
Heading 6910 |
Ceramic sinks, washing basins, pedestals, baths, bidets, water closet pans, flushing cisterns, urinals and similar sanitary fixtures |
– |
3% |
Our detailed analysis of the Finance Bill 2024 is contained here.
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