Skip to content

JEDCA MEDIA

Inform . Inspire . Empower

Primary Menu
  • Home
  • BUSINESS NEWS
  • Tech News
  • Start-up
  • CRYPTOCURRENCY
  • INVESTING
  • Sustainability
  • About Us
    • Contact Us
Light/Dark Button
Watch
  • Home
  • Business News
  • What Finance Bill 2025 Means for Tourism, Manufacturing
  • Business News

What Finance Bill 2025 Means for Tourism, Manufacturing

Phidel Kizito May 8, 2025 2 min read
Tour van

Photo/courtesy.

Kenya’s tourism and manufacturing sectors risk significant financial setbacks if the government moves forward with proposals to eliminate Value Added Tax (VAT) exemptions in the Finance Bill 2025, global tax advisory firm Ernst & Young (EY) has warned.

The firm cautions that the proposed changes, which would subject previously VAT-exempt goods and services to the standard 16 percent VAT rate, could stifle sector growth, drive up consumer prices, and derail the country’s broader economic development goals.

Among the items targeted for VAT inclusion are goods used directly in constructing tourism facilities, specially designed vehicles for transporting tourists, and inputs for locally assembling passenger vehicles.

While the government argues that the proposed amendments aim to expand the tax base and enhance compliance, EY and other experts warn of adverse ripple effects on industries that are key to job creation, foreign exchange earnings, and infrastructure development.

“The removal of exemptions for the tourism and manufacturing sectors is likely to negatively impact these industries and reduce revenue generation in the long term,” said Stephen Ndegwa, EY Associate Director.

“Although the government may realize short-term gains, the policy shift could discourage investment and lead to contraction in these critical sectors,” he added.

ALSO READ: Construction Sector Hit by Inflation and Credit Crunch

The tourism industry, still recovering from the disruptions of the COVID-19 pandemic and other economic shocks, could be particularly vulnerable.

Tour operators will now be required to pay VAT on specialized vehicles that were previously exempt.
In addition, the cost of constructing key tourism infrastructure such as convention centers, recreational parks, and large-scale tourism facilities could rise significantly.

These projects are vital components of Kenya’s Vision 2030 and the Bottom-Up Economic Transformation Agenda (BETA).

Manufacturers also face headwinds, as the standard VAT rating would apply to raw materials and components used in assembling vehicles locally. This could raise production costs, push up retail prices, and undermine efforts to promote local manufacturing under the “Buy Kenya, Build Kenya” initiative.

As Parliament begins debating the Finance Bill, stakeholders in tourism and manufacturing are urging policymakers to reconsider the proposed changes and explore alternative revenue measures that do not compromise economic recovery and growth.

Tags: Manufacturing Tourism VAT

Post navigation

Previous Previous post:

Bolt, Absa Train 100 Drivers in Financial Literacy Drive

Absa and Bolt reps
Next Next post:

Inside Treasury’s Strategy to Broaden Tax Collection Net

CS Mbadi

Related News

Kenya Airways plane
  • Business News

Kenya Airways Takes Loan Route to Boost Fleet – Here’s Why

August 27, 2025
Kenya Airways
  • Business News

Kenya Airways Returns to Losses as Operational Hurdles Mount

August 26, 2025
  • Kenya Airways Takes Loan Route to Boost Fleet – Here’s Why
  • Kenya Airways Returns to Losses as Operational Hurdles Mount
  • Unlocking SME Potential Through Strategic Partnerships
  • Kenya Mulls Repaying Chinese Loan in Yuan. Here’s Why
  • Stanbic Bank Appoints New Regional Chief Executive for East Africa

TOP Stories

President William Ruto and his Chinese counterpart XI Jinping
1 min read
  • Business News
  • Top Stories

Kenya Mulls Repaying Chinese Loan in Yuan. Here’s Why

Mabeya Davis August 21, 2025
SGA Security
2 min read
  • Top Stories

SGA Security Partners with ETA to Introduce EVs into its Operations

Jeff Mburu July 31, 2025
KRA employee.
2 min read
  • Business News
  • Top Stories

How KRA Recovered Sh86 B Under Tax Dispute Resolution Program

Phaisal Kutukai July 31, 2025
Auditor-general Nancy Gathungu.
2 min read
  • Top Stories

How Needy Students Were Left Out in New Higher Education Funding Model

NEWS DESK July 25, 2025
MOGO
2 min read
  • Top Stories

New MOGO Hotline Offers Lifeline to Kenyans Hit by Vehicle and Boda Boda Theft

Phidel Kizito July 23, 2025

Latest STORIES

Kenya Airways plane
  • Business News

Kenya Airways Takes Loan Route to Boost Fleet – Here’s Why

August 27, 2025
Kenya Airways
  • Business News

Kenya Airways Returns to Losses as Operational Hurdles Mount

August 26, 2025
SMEs
  • Business News

Unlocking SME Potential Through Strategic Partnerships

August 23, 2025
President William Ruto and his Chinese counterpart XI Jinping
  • Business News
  • Top Stories

Kenya Mulls Repaying Chinese Loan in Yuan. Here’s Why

August 21, 2025
Dr. Joshua Oigara
  • Business News

Stanbic Bank Appoints New Regional Chief Executive for East Africa

August 21, 2025
Henbon team
  • Business News
  • INVESTING

Henbon Unveils Sixth Housing Project in Nairobi as Demand Rises

August 19, 2025
At JEDCA MEDIA, we (journalists) believe in the power of information to transform lives, ignite conversations, and build a more informed and engaged global community. We are a dynamic media organization committed to delivering accurate, insightful, and impactful news that empowers You. We provide advertising services that meet your client's needs.

Email: info@jedcamedia.com
Call Us: +254745489330
  • Business News
  • CRYPTOCURRENCY
  • INVESTING
  • Start-up
  • Sustainability News
  • Tech News
  • Top Stories
  • WEALTH AND INVESTMENTS
  • Your Health
  • About Us
  • Advertise With Us | Contact Us
  • Privacy Policy
Copyright © 2025 JEDCA MEDIA NETWORK | All Rights Reserved. | ChromeNews by AF themes.

Cookie Settings.

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Read More

Decline Cookie Settings
Accept Accept All
Cookies are small text files that can be used by websites to make a user's experience more efficient. The law states that we can store cookies on your device if they are strictly necessary for the operation of this site. For all other types of cookies we need your permission. This site uses different types of cookies. Some cookies are placed by third party services that appear on our pages.
For more information on how Google's third party cookies operate and handle your data, see: Google's Privacy Policy
  • Necessary
    Always Active
    Necessary cookies help make a website usable by enabling basic functions like page navigation and access to secure areas of the website. The website cannot function properly without these cookies.
    Name Domain Purpose Expiry Type
    wpl_user_preference jedcamedia.com WP GDPR Cookie Consent Preferences. 1 year HTTP
    YSC youtube.com YouTube session cookie. 55 years HTTP

  • Marketing
    Marketing cookies are used to track visitors across websites. The intention is to display ads that are relevant and engaging for the individual user and thereby more valuable for publishers and third party advertisers.
    Name Domain Purpose Expiry Type
    __gads jedcamedia.com Google advertising cookie set on the websites domain (unlike the other Google advertising cookies that are set on doubleclick.net domain). According to Google the cookie serves purposes such as measuring interactions with the ads on that domain and preventing the same ads from being shown to you too many times. 1 year HTTP
    VISITOR_INFO1_LIVE youtube.com YouTube cookie. 6 months HTTP

  • Analytics
    Analytics cookies help website owners to understand how visitors interact with websites by collecting and reporting information anonymously.
    Name Domain Purpose Expiry Type
    _ga jedcamedia.com Google Universal Analytics long-time unique user tracking identifier. 2 years HTTP
    IDE doubleclick.net Google advertising cookie used for user tracking and ad targeting purposes. 2 years HTTP

  • Preferences
    Preference cookies enable a website to remember information that changes the way the website behaves or looks, like your preferred language or the region that you are in.
    Name Domain Purpose Expiry Type
    NID google.com Google unique id for preferences. 6 months HTTP
    JEDCA MEDIA jedcamedia.com We use cookies to enhance your browsing experience, analyze site traffic, personalize content, and serve relevant ads. By continuing to use our site, you agree to our use of cookies. You can manage your preferences in our Privacy Policy. 365 DAYS HTTP

  • Unclassified
    Unclassified cookies are cookies that we are in the process of classifying, together with the providers of individual cookies.
    Name Domain Purpose Expiry Type
    nitroCachedPage jedcamedia.com --- 55 years ---
    _ga_MFHCHTY935 jedcamedia.com --- 2 years ---
    test_cookie doubleclick.net Google advertising domain. Session HTTP
    tnp-popup-count jedcamedia.com --- 1 month ---
    __gpi jedcamedia.com --- 1 year ---
    __eoi jedcamedia.com --- 6 months ---
    __Secure-ROLLOUT_TOKEN youtube.com --- 6 months ---
    VISITOR_PRIVACY_METADATA youtube.com --- 6 months ---

Cookie Settings