The government has dropped the proposed 16 percent levy on bread 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 Kimani, legislators also resolved to exempt mobile money transfer services.

The government has also removed a 2.5 percent proposed levy on motor vehicle owners as contentious proposals from Finance Bill 2024 have been dropped.

All locally manufactured items, including diapers and sanitary pads, will not be subject to the Eco Levy.

Further, the VAT threshold will be increased from 5m to 8m. SMEs with a turnover of less than 8m will not be required to register for VAT.

In addition, businesses with a turnover of below 1m, including small-scale avocado farmers, will be exempt from eTIMS registration.

Excise duty will only be levied on imported table eggs, onions, and potatoes.

Nevertheless, alcohol is being changed from volume-based taxation to alcohol content-based taxation. Alcohol manufacturers producing alcohol with very high alcohol content will be required to pay higher duty based on alcohol content.

Kimani also said that the government is increasing the amount allowable for tax exemption for pension contributions from 20,000 to 30,000 per month.

 All 46,000 JSS teachers will be hired on permanent and pensionable terms, and another 20,000 will be recruited.