Relief on retirees as Parliament reject tax on pension, cooking gas

Pensioners and consumers of maize meal are some of the beneficiaries of the amended finance bill 2020 by the National Assembly. 

The Finance and National Planning Committee thwarted the national treasury’s plan to levy taxes on retiree’s benefits as well as imposing tax on liquefied petroleum gas.

National Treasury´s attempts to impose a ten percent tax on earnings by retirees of up to Sh33000, or Sh400,000 a year, and a maximum of 25 percent for those earning more than Sh100,000 a month or Sh1.2 million a year had caused widespread condemnation from labor organizations and pension schemes.

However pensioners are now likely to be spared from the taxman hammer after the Budget Planning Committee scrapped the proposals, which was likely to hit even the lawmakers hard.

Parliament has also come to the rescue of consumers designating maize, wheat and Cassava flour as essential products that should attract zero taxes.

Legislators argued that the move was likely to raise the cost of living in Kenya as maize and wheat are some of the most popular foods on Kenyans diet.

During the debate in parliament Thursday the house further shot down plans by treasury to impose a 20 percent excise duty proceeds from betting saying this will cripple the multi-billion shillings gaming industry.

In its report for consideration, the Finance Bill 2020 tabled on the floor of the house Thursday, legislators further thwarted treasury’s plan to impose a 14 percent tax on cooking gas saying the move will hurt the country’s agenda of expanding forest cover and migration to green energy .

With online transactions expected to rise, the legislators also okayed the imposition of a 14 percent value added tax on digital business despite spirited attempts by online traders to shoot down the plan.

The house is now expected to pass the amended finance bill 2020 next week before it becomes law on 1st of July this year.

also read https://www.kbc.co.ke/relief-for-pensioners/