The Finance Bill 2024 has been the subject of much controversy in Kenya. One of the most contentious provisions is the proposed 16% Value Added Tax (VAT) on petroleum products. This tax would significantly increase the cost of fuel, which would have a ripple effect on the prices of goods and services throughout the economy.

Another controversial provision is the proposed 20% excise tax on mobile money transactions. This tax would make it more expensive to send and receive money via mobile phone, which is a common way for Kenyans to conduct financial transactions.

The Finance Bill 2024 also includes a number of other provisions that have been criticized by businesses and civil society groups. These include:

- A 15% withholding tax on dividends
- A 35% corporate income tax rate
- A 2% turnover tax on businesses with an annual turnover of over Ksh 50 million

These provisions have been criticized for being too burdensome on businesses and for stifling economic growth.

Sources:
- [BBC](https://www.bbc.com/news/articles/ce77ld43lngo)
- [CNN](https://www.cnn.com/2024/06/18/africa/kenya-rethinks-tax-bill-protests-intl-latam/index.html)
- [The East African](https://www.theeastafrican.co.ke/tea/news/east-africa/kenya-anti-tax-demos-spread-across-cities-and-towns-4663784)

**Controversial Terms in the Finance Bill 2024**

**1. Taxation of Virtual Digital Assets (VDAs)**

* Imposition of 30% tax on income from the transfer of VDAs, including cryptocurrencies.
* Concerns raised about the lack of clarity in defining VDAs and the potential impact on innovation in the crypto industry.

**2. Increase in Minimum Alternate Tax (MAT)**

* Increase in MAT rate from 15% to 18.5% for companies with book profits exceeding ₹10 crore.
* Criticism that it will increase the tax burden on profitable companies and discourage investment.

**3. Tax on Employee Stock Options (ESOPs)**

* Taxation of ESOPs at the time of exercise, instead of the time of sale.
* Concerns that it will discourage startups from offering ESOPs as a form of employee compensation.

**4. Surcharge on Income from Professions**

* Imposition of a 10% surcharge on income from professions exceeding ₹50 lakh.
* Criticism that it unfairly targets professionals and may discourage entrepreneurship.

**5. Tax on Foreign Remittances**

* Imposition of a 20% tax on remittances exceeding ₹7 lakh per year.
* Concerns that it will discourage remittances from overseas Indians and impact the foreign exchange market.

**6. Tax on Online Gaming**

* Imposition of 28% GST on online gaming services.
* Concerns that it will stifle the growth of the online gaming industry and lead to job losses.

**7. Tax on Non-Resident Indians (NRIs)**

* Removal of the exemption on interest income earned by NRIs on deposits in Indian banks.
* Criticism that it will discourage NRIs from investing in India and impact the flow of foreign capital.

**8. Tax on Capital Gains from Sale of Immovable Property**

* Increase in the holding period for claiming exemption from capital gains tax on the sale of immovable property from 2 years to 3 years.
* Concerns that it will discourage real estate investment and impact the housing market.

**9. Tax on Dividend Income**

* Removal of the dividend distribution tax (DDT) and imposition of tax on dividends in the hands of shareholders.
* Criticism that it will increase the tax burden on individual investors and reduce the attractiveness of dividend-paying stocks.

**10. Tax on Agricultural Income**

* Proposal to tax agricultural income above a certain threshold.
* Concerns that it will discourage agricultural investment and impact the livelihoods of farmers.

The Finance Bill 2024 in Kenya has sparked significant controversy and public outcry due to several proposed tax measures and amendments. Here are some of the key contentious elements:

1. **Introduction of New Taxes**:
   - The bill proposed a 16% Value Added Tax (VAT) on essential items such as bread, which was met with strong opposition from the public. This tax was eventually scrapped following protests.
   - Other new taxes included levies on motor vehicles and other goods, which were seen as burdensome to the average Kenyan.

   Sources:
   - [BBC](https://www.bbc.com/news/articles/ce77ld43lngo)
   - [CNN](https://www.cnn.com/2024/06/18/africa/kenya-rethinks-tax-bill-protests-intl-latam/index.html)

2. **Changes to Income Tax**:
   - The bill proposed amendments to the Income Tax Act, including the deletion of certain definitions and provisions. These changes were perceived as complex and potentially increasing the tax burden on individuals and businesses.

   Sources:
   - [EY](https://www.ey.com/en_gl/tax-alerts/kenya-proposes-tax-changes-under-the-finance-bill--2024)
   - [Parliament of Kenya](http://www.parliament.go.ke/sites/default/files/2024-05/Finance%20Bill%2C%202024_0.pdf)

3. **Withholding Tax on Rental Income**:
   - The bill sought to impose withholding tax on rental income, requiring all persons who receive rental income on behalf of others to withhold tax. This measure was seen as an additional administrative burden and a potential increase in rental costs.

   Sources:
   - [EY](https://taxnews.ey.com/news/2023-0888-kenya-proposes-tax-changes-under-the-finance-bill-2023)

4. **Public Protests and Government Response**:
   - The introduction of these taxes led to widespread protests across the country, with demonstrators clashing with police. The government was forced to reconsider and scrap some of the proposed taxes due to the public backlash.

   Sources:
   - [ABC News](https://abcnews.go.com/International/kenya-braces-protests-controversial-tax-bill/story?id=111243473)
   - [Al Jazeera](https://www.aljazeera.com/news/2024/6/20/kenya-police-use-tear-gas-water-cannon-as-hundreds-protest-over-tax-hikes)

These elements highlight the significant public discontent and the challenges faced by the government in balancing fiscal policy with public acceptance. The Finance Bill 2024 remains a hot topic in Kenya, reflecting broader concerns about economic management and social equity.

what are the controversial terms in the finance bill 2024?

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what are the controversial terms in the finance bill 2024?