Govt Proposes 47 Tax Amendments to Fund Education and Prevent Teachers’ Strike

Govt Proposes 47 Tax Amendments to Fund Education and Prevent Teachers’ Strike

In a bid to secure funds for critical sectors like education and avert a potential teachers’ strike, the government is urgently finalizing plans to reintroduce the contentious eco-levy tax as part of its new revenue-raising efforts.

These measures aim to address a Ksh.150 billion deficit caused by the withdrawal of the Finance Bill 2024. The Tax Amendment Bill, which includes 47 clauses, is being finalized for reintroduction to Parliament.

Treasury Cabinet Secretary (CS) John Mbadi disclosed during an interview with Citizen TV that the eco-levy, a major point of contention, will be included in the new proposals.

However, he confirmed that “sensitive” items such as sanitary towels would be excluded from the tax.

“We have lined up 47 amendments among them the eco-levy. We will however remove the ban on sanitary pads and other sensitive items,” he said.

This adjustment is a response to public backlash and protests led by Gen-Z, which initially led to the bill’s rejection.

Additionally, the eco-levy faced strong opposition from multinational corporations, including Coca-Cola, which objected to the proposed 10% excise duty.

Extending Tax Amnesty and New Tax Exemptions

To boost revenue, the government is also extending the tax amnesty period by six months, allowing more Kenyans to file their returns without penalties.

CS Mbadi expressed optimism that this extension would encourage greater compliance, as some individuals had previously avoided paying taxes due to stringent deadlines.

Furthermore, the government plans to exempt certain basic commodities, such as bread, from taxes.

This move is expected to save Ksh.70 billion by reducing government expenditure on tax refunds, some of which have been deemed fictitious.

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National Assembly Finance Committee Chairperson Kimani Kuria stated that they are awaiting the Treasury’s proposals to begin deliberations.

In addition to the eco-levy, CS Mbadi announced upcoming changes at the Kenya Revenue Authority (KRA).

These changes, aimed at automating systems and sealing loopholes, are projected to bring in an additional Ksh.105 billion.

Urgency and Fiscal Adjustments

The ministry is working against the clock to implement these tax measures by the September 30 deadline.

These new measures are essential to address the financial gaps left by the Finance Bill 2024’s failure.

President William Ruto has already announced a Ksh.177 billion spending cut and Ksh.169 billion in additional borrowing to manage the shortfall.

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The government argues that these new tax measures will be crucial for funding essential services.

The additional revenue is expected to go towards paying teachers, who have threatened to strike, as well as covering expenses for security forces and university funding.

This comprehensive strategy is designed to stabilize the nation’s finances while addressing urgent public sector needs.

Govt Proposes 47 Tax Amendments to Fund Education and Prevent Teachers’ Strike

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