- the Bill seeks to impose excise duty for imported furniture excluding furniture from the East African Community.
- Bill imposes excise duty on imported fish and hence seeks to protect the local fishing industry which provide a source of living for many Kenyans.
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The government has proposed radical tax measures aimed at promoting local businesses, protecting jobs, and boosting manufacturing.
Part of President William Ruto's promises was to create jobs for millions of unemployed youth through investments in manufacturing and tax incentives.
In the Finance Bill, 2023, the government has proposed to impose additional levies on imported products such as steel, paper, plastics, and paints among other goods.
National Assembly Majority Leader Kimani Ichung'wa explains that this shall protect local manufacturers from unfair competition and further protect the job market created by local businesses.
The Bill also proposes to provide for export and investment promotion levy on all goods specified in the Third Schedule of the Miscellaneous Fees and Levies Act, 2016 imported into the country for home use.
The purpose of the levy shall be to provide funds to boost manufacturing, increase exports, create jobs, save on foreign exchange, and promote investments.
In boosting the Jua Kali sector, the Bill seeks to impose excise duty for imported furniture excluding furniture from the East African Community.
''This shall protect and promote local production, including our Jua kali sector engaged in the manufacture of furniture,'' Ichung'wa said.
In promoting the fishing sector the Bill imposes excise duty on imported fish and hence seeks to protect the local fishing industry which provides a source of living for many Kenyans.
To promote the manufacturing sector, the Bill proposes to provide for export and investment promotion levy, on all goods specified in the Third Schedule of the Miscellaneous Fees and Levies Act, 2016 imported into the country for home use.
''The purpose of the levy shall be to provide funds to boost manufacturing, increase exports, create jobs, save on foreign exchange, and promote investments,'' Ichung'wa said.
Under the proposed law, Kenyan businesses will enjoy VAT protections.
As it is presently, VAT is payable by transfer of a business as a going concern, hindering business growth through restructuring.
''The Finance Bill once enacted shall provide for VAT exemption for transfer of business as going concern,'' he said.
The aim is to spur business restructuring and encourage mergers and acquisitions.
Through the Finance Bill, the government proposes a reduction of the rate of Import Declaration Fee from 3.5 per cent to 2.5 per cent of the customs value of imported goods.
Further, the Bill proposes a reduction of the rate of the Railway Development Levy from 2 per cent to 1.5 per cent.
''This shall in turn reduce the cost of importation of goods and hence shall spur businesses engaged in the sale of imported goods,'' Ichung'wa said.
To protect the local motor vehicle assembly sector, the Bill proposes to continue with reduced rate of corporation tax of 15 per cent for 5 years from the commencement of motor vehicle assembly operations.
The Finance Bill proposes a further extension of the reduced rate to a company which achieves a local content of 50 per cent of the ex-factory price value.
The Finance Bill defines local content to mean parts designed and manufactured in Kenya by an original equipment manufacturer operating in Kenya.
''This will encourage motor vehicle assemblers to utilize local content and benefit from the preferential corporate tax rate,'' Ichung'wa said.