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President Ruto Signs Finance Bill 2023 and Appropriations Bill 2023 into Law.

On Monday, President William Ruto signed the Finance Bill, 2023 and the Appropriations Bill, 2023 into law at State House in Nairobi.

Despite a fierce argument between the opposition and the ruling party regarding the proposals within it, the Finance Bill, 2023, was successfully passed. On Wednesday night last week, Members of Parliament approved the bill as proposed by the administration of President William Ruto.

This implies that Kenyans will now be required to delve deeper into their finances to support Ruto’s inaugural budget as the Head of State, leading to an escalated burden on their financial resources.

President William Ruto also gave his approval to the Supplementary Appropriations (No. 2) Bill, 2023, which allows the National Government to spend an additional amount of Sh22.9 Billion from the Consolidated Fund.

This decision leads to a decrease in overall spending by Sh25.5 Billion compared to the revised total National Government expenditure that was approved in the Supplementary Appropriations (No. 1), Act 2023.

The reduction includes an increase in recurrent spending of Sh9.5 Billion and a rationalization of development spending amounting to Sh35 Billion.

This reduction in spending aligns with the Government’s efforts to consolidate its finances, particularly in light of debt servicing payments.

The Appropriations Bill, 2023 enables the National Government to withdraw money from the Consolidated Fund for its expenditures.

Present at the signing ceremony were Deputy President Rigathi Gachagua, Prime Cabinet Secretary Musalia Mudavadi, Speaker of the National Assembly Moses Wetang’ula, Speaker of the Senate Amason Kingi, Attorney General Justin Muturi, and a group of MPs led by Majority leader Kimani Ichung’wah.

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This is the first Appropriations Bill introduced under the Kenya Kwanza Government, and it aims to allocate the necessary resources to fulfill the government’s manifesto and promises for various services and projects.

This significant development marks the commencement of the first budget under the Kenya Kwanza administration, which places a strong emphasis on the Bottom-up Economic Transformation Agenda. This administration has identified five key pillars to drive this transformation and has made them the top priority for the budget.

Last Tuesday, during a lengthy session that extended into the late hours of the night, the National Assembly engaged in deep discussions over the Bill, which encompassed a total of 87 proposed amendments. Among these amendments, several were successfully approved.

One particularly noteworthy proposal that received majority support was the increase in the value-added tax on fuel from 8 percent to 16 percent.

The Housing levy, initially suggested at 3 per cent, faced significant controversy. However, it was eventually approved with an amendment, reducing it to 1.5 per cent of gross pay. The levy underwent a transformation and became a tax.

Initially, the concept behind the levy was for Kenyans to accumulate savings over a seven-year period, which they could later claim.

The tax rate for digital creators has been revised to 5 per cent, following an initial proposal of 15 per cent.

Additionally, the Betting and Insurance withholding tax rates have been adjusted. Betting withholding tax will now be charged at 12.5 per cent, while Insurance withholding tax will be set at 16 per cent.

The bill received backing from a significant number of Members of Parliament (MPs), with at least 184 showing support, primarily from the Kenya Kwanza group. However, one MP, Gathoni Wamuchomba from Githunguri, expressed opposition to the bill. On the other hand, 88 MPs, mostly affiliated with Azimio, opposed the proposed amendment.

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