Nairobi
Tuesday, 11 June, 2024
By Felix Mogaka
KANU National Chairman Gideon Moi has urged members of Parliament to address the concerns of the Kenyan public regarding the proposed Finance Bill 2024.
The Bill, which has sparked intense debate, includes tax proposals that many fear could worsen the already difficult economic conditions faced by individuals, households, and businesses across the nation.
Moi emphasized the importance of the National Assembly Finance and Planning Committee ensuring that its final report on the Bill reflects the opinions, worries, and aspirations of the Kenyan people.
He pointed out that the punitive nature of the tax proposals, if not revised, could plunge more citizens into poverty.
The former Baringo Senator criticized the committee for what he described as “superficial public participation exercises” conducted in the previous financial year, which largely ignored the public’s input.
Highlighting the disconnect between the government’s aggressive tax collection approach and the economic downturn, Moi cited the National Treasury’s report from May, which revealed that the Kenya Revenue Authority (KRA) fell short of its projected tax revenue collections.
He argued that the Bill, in its current state, would be counterproductive, diminishing Kenyans’ purchasing power and potentially driving businesses out of the economy.
“The National Assembly Finance and Planning Committee must ensure that its final report reflects the opinions, concerns, and aspirations of Kenyans on the Bill. It contains punitive tax proposals on individuals, households, and businesses, amidst tough economic times. If not carefully revised, it is likely to condemn more Kenyans into poverty.”
“It must also not be lost on the government that starvation and malnutrition still afflict many people, especially children. Increasing taxes on basic household food items like bread will inevitably compound these problems,” he added.
Moi also took issue with the Bill’s proposals to impose excise duty and VAT on essential financial services, arguing that such measures would contradict efforts to promote financial inclusion and combat poverty.
According to the former Baringo Senator, the Parliamentary committee largely ignored public opinion when it sent the tax-heavy Finance Act, 2023, to President William Ruto for approval.
“This is an opportunity for the committee to redeem itself from the superficial public participation exercises it subjected Kenyans to in the 2023/2024 financial year, where public input was largely disregarded in the final report presented to the National Assembly,” he said.
He underscored the necessity of a sustainable taxation framework that fosters economic growth and expands the tax base, rather than imposing burdensome levies.
“The government’s approach to aggressively exacting tax beyond the point of elasticity during an economic downturn will inevitably reduce the tax revenue. Ultimately, the Finance Bill will be self-defeatist as evidenced in the National Treasury’s report in May that KRA fell short of its projected tax revenue collections,” he said.
“At this point, Kenyans’ hope solely lies on the National Assembly to amend the Bill to alleviate the burden of over-taxation. Moving forward, the government must shift its focus from taxation to industrialization through manufacturing to achieve sustainable, private-sector-led economic growth.”
As the debate continues, Moi’s stance resonates with the sentiments of economic experts and the general public, who caution against enacting the Finance Bill without careful consideration and necessary amendments.
The hope of many Kenyans now rests with the National Assembly to amend the Bill and alleviate the burden of over-taxation.