Kenya Kwanza administration led by President William Ruto aims to spend a whopping Ksh. 3.9 trillion in the finance year 2024/2025, which is bound to start on 1st July this year. To realize this budget, the government is targeting to collect taxes from Kenyans amounting to Ksh.3.353 trillion. Ksh.2.913 trillion will be collected as ordinary revenue, while the balance will come in the form of appropriations-in-aid. To raise the 2.913, several tax proposals have been introduced to the Finance Bill 2024. In this article, we shall discuss these proposals in detail so that you can get to know them better and understand what you can expect moving forward. Read on to know more. 1. Motor Vehicle Tax Proposal This proposal caught many motorists by surprise. They now have to pay 2.5% of the value of their motor vehicles whenever they renew their insurance annually. As a motorist, brace yourself to pay at least Ksh.5000 and not more than Ksh.100000 per year for your car if this proposal is not changed. 2. Digital Marketplace Tax Proposal If you usually operate a digital platform or marketplace, you have to tighten your belt as you will be taxed whether you are a non-resident or a resident of Kenya. However, the tax rates differ as non-resident individuals will pay 20% tax while their counterparts will have to part with 5% of their income. Glasses, calculator and a wallet with money ontop of a laptop 3. Significant Economic Presence Tax Proposal Suppose the Finance Bill 2024 becomes law, it will change the provisions on Digital Service Tax (DST) and, in its place, bring on board a new tax known as the Significant Economic Presence tax. The latter requires you to pay a tax of 30% of the profit made from offering services or doing business on a digital marketplace. If this proposal sees the light of day, those who operate and make money from digital platforms will have to part with more bucks to meet this tax requirement. 4. Introduction of 16% VAT on Financial Services Proposal Earlier on, we had several financial services that used to be VAT exempted. However, with the new Finance Bill 2024, some of these financial services will be subjected to a 16% VAT. Some of the services that will be affected by this tax include: Handling and process of cheques Telegraphic money transfer services Issuance of debit and credit cards Issuance of promissory notes, bills of exchanges, postal and money orders Offering financial services on behalf of another entity to earn a commission. Making foreign exchange transactions Logo of Money transaction companies in kenya 5. 20% Exercise Duty on Money Transfer Services Proposal Back then, money transfer services were subjected to a 15% tax. However, the Finance Bill 2024 aims to increase that percentage to 20%. Some of the services that will be dealt with a blow include the money transfer services offered by entities such as banks, financial service providers, and other agencies. Final Thoughts If the proposals suggested above are anything to go by, the cost of living is bound to go high. This is because the final consumer of the services mentioned above will bear the brunt of everything. Whether it is motor vehicle tax or exercise duty tax, all these taxes are meant to adversely affect the ordinary Kenyan. Since the Finance Bill is still being debated, most Kenyans wish that some of those proposals can be amended to suit their needs at the moment.