The government is preparing to reintroduce the contentious eco-levy tax as part of new revenue-raising proposals aimed at generating an additional Kes.150 billion. This move seeks to address the budget deficit caused by the withdrawal of the Finance Bill 2024.
These additional tax measures are outlined in the Tax Amendment Bill, which consists of 47 clauses and is set to be reintroduced in Parliament.
Speaking to mainstream media on Sunday, Treasury CS John Mbadi confirmed that the eco-levy would be among the returning clauses. “We have lined up 47 amendments, including the eco-levy. However, we will remove the ban on sanitary pads and other sensitive items,” he stated.
To further boost tax revenue, the government plans to extend the tax amnesty period by six months, allowing more Kenyans to file their returns.
“Some people have been avoiding paying taxes due to the deadlines. We hope this extension will encourage more people to comply,” Mbadi said.
Additionally, the government intends to exempt certain basic commodities, such as bread, from taxes to save an additional Kes.70 billion.
“We’ve been paying Ksh.525 billion in tax refunds, some of which are fictitious. By exempting bread from taxes, we will maintain revenue levels while reducing government expenditure,” Mbadi explained.
CS Mbadi also announced that a series of reforms at the Kenya Revenue Authority (KRA) would bring in an additional Kes.105 billion by “sealing all loopholes through system automation.”
The ministry is now racing to implement these tax measures by September 30. Kimani Kuria, Chairperson of the National Assembly Finance Committee, stated, “We are waiting for the Treasury to bring those proposals so that we can begin.”
