Kenya’s National Assembly has advanced the controversial Finance Bill 2024 despite widespread public outcry, setting the stage for intense debates before the June 30 deadline.

A total of 204 MPs voted in favor of the Bill, 115 voted against it, with no abstentions. The Bill now moves to the Second Reading.

The decision follows a contentious First Reading, reflecting lawmakers’ intent to proceed amid significant public opposition. The Bill still needs to pass two more stages before becoming law and will now be scrutinized by the Committee of the Whole House for proposed amendments.

Divisions are clear, with the Azimio la Umoja One Kenya Coalition opposing the Bill while the Kenya Kwanza Coalition supports it.

Led by Molo MP Kuria Kimani, the National Assembly Finance Committee has proposed amendments to address objections, including reducing excise duties on mobile money transfers from 20% to 15%, eliminating the 16% VAT on financial services and foreign exchange transactions, and scrapping the 16% VAT on bread. The committee also suggests repealing the 2.5% motor vehicle tax and exempting small-scale farmers from mandatory use of the Electronic Tax Invoice Management System (e-Tims).

All MPs will now have the opportunity to shape the Bill through further deliberations and amendments. A subsequent vote, expected next week, will determine whether the Bill becomes law on July 1. Failure to pass the Finance Bill could lead to a fiscal crisis with significant implications for Kenya’s budget and economic policy.

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