In a year in which there were crucial changes proposed to Kenya’s tax system, the National Assembly passed the Finance Bill 2018, but the President refused to assent to it and sent it back to Parliament with his proposed amendments to fuel, banking, housing, gambling and other taxes.

I have made a Communication to the House, during this afternoon's Special Sitting, in regards to the President's Memorandum, on his refusal to assent to the Finance Bill, 2018 and his consequent referral of the Bill to the House for consideration.https://t.co/rUO4APER9K

— Speaker. J.B. Muturi (@SpeakerJBMuturi) September 18, 2018

Sectors affected by the memorandum.

• Banking: For every transaction your bank charges you, currently there is a 10% levy which will now go up to 20%. Also, the fee on money transfer and mobile banking services will be 20% on excisable value – up from a proposed 12.5%.
• Telecommunications: a tax on telephone and Internet services will be 20%, up from an earlier 15% tax on the excisable value
•  Food: He proposed reinstating a sugar confectionery tax that parliament had dropped.
• Fuel; Kerosene will cost the same as diesel after the introduction of an anti-adulteration tax. VAT which Parliament had pushed back by another two years, and which the President wrote would cause a Kshs 35 billion shortfall in this year’s budget. He, therefore, proposed an immediate reinstatement of VAT at 8%. (VAT in the country is levied at 16% for all other goods and services that qualify).
• Housing: Employers shall pay a new housing development levy on behalf of employees – with the employer’s contribution at 1.5% of salary and the employees at 1.5% of salary – up to a maximum of Kshs 5,000 – to be remitted on the 9th of the following month to the proposed National Housing Development Fund.

We are creating a fund that will raise one billion a month. It is not attached to anything; it only states it is to upgrade housing in Mathare, Kibra, Korogocho. Without special legislation, it will only exploit residents, more than NYS. I oppose it – @tjkajwang #Bungeliveke

— Mzalendo (@MzalendoWatch) August 29, 2018

Employees who don’t qualify for the low-cost housing proposed will still have their money go to the Housing Development Fund and will get it back when they retire,

• Gambling: tax reduced from 35% to 15%.

The President also asked Parliament to reduce the national government budget by Kshs 55 billion. Parliament was on a month-long recess but has resumed this week for special sitting sessions relating to the Finance Bill 2018. They received the President’s memorandum on Tuesday 18th September, with the budget committee meeting on Wednesday to review and approve these changes for Parliament to vote on Thursday 20th September.
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