The government has dropped the proposed 2.5 percent levy on motor vehicles on motor vehicles following a Kenya Kwanza Parliamentary Group meeting chaired by President William Ruto at State House on Tuesday morning.

 In his address to the media, Finance and Planning Committee chairperson Kimani Kuria said that the drop has been reached following a series of public participation in which Kenyans unanimously called for the scrapping of the levy from the proposed bill.

“We have listened to the view of Kenyans and we are all in agreement that there are two things that we must do and one of them is that we need to protect Kenyans from the high cost of living and therefore the proposed 16 percent VAT on bread has been dropped,” Kuria said.

According to a statement by State House Spokesperson Hussein Mohammed on X, the government has also removed the tax on the transportation of sugar.

Other scrapped taxes include VAT on financial services and foreign exchange transactions, increased mobile money transfer fees, and an excise duty on vegetable oil.

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Further, the spokesperson has revealed that the levies on the Housing Fund and Social Health Insurance will become income tax deductible.

In addition, locally manufactured products like sanitary towels, diapers, phones, computers, tires, and motorcycles are exempt from the Eco Levy.

The VAT registration threshold will be increased from Kes 5 million to Kes 8 million, reducing the need for small businesses to register.