President Uhuru Kenyatta has signed into law the Finance Bill 2019 which allows banks to issue loans without a limit on the rate interest.
Its official – Uhuru signs law allowing banks to issue expensive loans
The law also introduces taxes for security guards and cleaners
President Kenyatta enacted the bill into law shortly after MPs failed to overturn the President's memorandum which set out to remove the rate cap.
Overturning the President's memorandum required at least two thirds of MPs in the National Assembly to oppose it.
However, majority of MPs stayed away from the vote, effectively allowing the President's memorandum to pass as Parliament did not raise quorum.
The removal of rate caps will reverse a law set in September 2016 which sought to protect loan consumers from exaggerated bank interests that would be arbitrary adjusted to the advantage of banks. The removal of the cap will not apply to loans taken before today when the law was passed.
The Finance Bill 2019 will also have negative effects on low-income workers who have been incorporated into the tax bracket as the government struggles with a near-economic meltdown.
Employers are now rewuired to withold tax before paying low income earners including security guards, drivers and cleaners are among those.
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