The 2024 Finance Bill was tabled in the Parliament of Kenya On 13 May 2024 .

The Finance Bill proposes the following changes, with an effective date of 1 July 2024:

1. Increases the tax-free subsistence allowance(per diem) from the daily maximum of Ksh2 000 to 5% of gross salary.
2. Increases the value of aggregate tax-free fringe benefits from Ksh36 000 per annum (Ksh3 000 per month) to Ksh48 000 per annum (Ksh4 000 per month).
3. Increases the tax-free meal benefit from Ksh48 000 per annum (Ksh4 000 per month) to Ksh60 000 per annum (Ksh5 000 per month).
4. Increases the tax exemption of a gratuity or similar payment which is paid by the employer to a registered pension fund scheme in respect of employment or services rendered, from Ksh240 000 to Ksh360 000 for each year of service
5. Introduces the following new tax deductions:
   • SHIF Deduction: the employee’s actual contribution to the Social Health Insurance will be an allowable tax deduction
   • Affordable Housing Deduction: the employees’ actual Affordable Housing Levy contribution will be allowable tax deduction
   • Post-retirement medical fund (PRMF) deduction: the employees’ actual contribution to post-retirement medical fund scheme will be an allowable tax deduction, up to maximum allowable limit of Ksh10 000 per month
6. Repealing the following reliefs:
   • Affordable housing relief : the employee contribution to the AHL will now attract a tax deduction, no longer a relief
   • Insurance relief :the employee contributions to NHI(SHI when implemented) will now attract a tax deduction, no longer a relief
   • PRMF relief :the employee contribution to a PRMF scheme will now attract a tax deduction, no longer a relief
7. Increases the maximum allowable tax deduction limit for employee pension/provident fund contribution from Ksh240 000 per annum (Ksh20 000 per month) to Ksh360 000 (Ksh30 000 per month)
8. Provide exemption for a pension benefit from a registered pension/provident fund to a person who has attained the retirement age as determined in the fund or who retires prior to reaching retirement age due to ill health or withdraws after being a member of that fund for more than twenty years (currently, pension benefits are only exempt if paid to a person who is 65 years old or older)

Take note: The above has not been promulgated, only once promulgated, the measures will come into effect, and will Sage develop and publish the relevant changes. We are aware that there is substantial public opposition to this bill, with ongoing protests calling for it to be scrapped. This is likely to lead to a possible series of court rulings, which could lead to  potential legal challenges and delays.