Implications Of The Withdrawal Of The Finance Bill, 2024

The President recently referred the Finance Bill, 2024 (the Bill) to Parliament with the recommendation to delete all the clauses, what next?  

The Bill, passed by Parliament on 25th June 2024, amidst nationwide demonstrations, proposed several amendments and significant measures aimed at increasing the tax base and enhancing revenue collection. 

When the Bill was presented to the President, he constitutionally had two options: to assent to it or to refer it to Parliament. On 26th June 2024, the President issued a Presidential Memorandum of Referral, exercising the powers granted to him under Article 115(1)(b) of the Constitution. In this memorandum, the President expressed reservations regarding the entire content of the Bill and recommended the deletion of all its clauses.  

Upon referral, Parliament has the authority to amend the bill in response to the President’s reservations or to pass it again without amendments. 

To help tackle the fiscal deficit, the President stated that various government arms would reduce their expenditure budgets and introduce austerity measures to operate within the existing revenue framework. Furthermore, the Finance Act, 2023 continues to apply.  

Looking ahead, there is an expectation of intensified Kenya Revenue Authority (KRA) audits as the pressure to collect revenue  to meet the fiscal deficit mounts.  

Conclusion  

Should you have any questions on this or any other matter, please do not hesitate to contact: Jane Mugo jmugo@cmadvocates.com or Tabitha Muchiri on tmuchiri@cmadvocates.com