MPs should not ignore public outcry on taxes
What you need to know:
- The Budget has thus been read before the approval of the Bill by Parliament.
- The National Treasury has urged the MPs to endorse the tough proposals in the Bill.
Ordinary Kenyans, financial experts and lawyers have used the just-ended public participation opportunity to flatly reject the proposed taxes in the Financial Bill, 2024.
As the National Assembly Finance and Planning Committee has now retreated to review the controversial Bill following National Treasury Cabinet Secretary Njuguna Ndung’u’s presentation of the national Budget on Thursday, in line with the East African Community (EAC) Treaty, there is palpable anxiety.
According to the EAC Treaty, the Finance ministers of the partner states read their budgets simultaneously.
The Budget has thus been read before the approval of the Bill by Parliament. The people’s major expectation is that the committee will reject what critics have dubbed “punitive and oppressive” tax proposals.
Debate has been raging, with the public mood clearly against the taxes. The committee report will be tabled in Parliament next week.
For its part, the National Treasury has urged the MPs to endorse the tough proposals in the Bill.
It wants the lawmakers to adopt the tax measures to raise revenue to, among other things, pay the public debt, which stands at Sh11.2 trillion. The Treasury argues that if not effected, the debt situation could get worse.
Treasury Principal Secretary Chris Kiptoo says the debt-to-gross domestic product (GDP) now stands at 72 per cent.
This is way above the 55 per cent set in the Public Finance Act. The Bill seeks to impose numerous taxes on essential commodities, including a 16 per cent Value Added Tax (VAT) on bread.
Other unpopular taxes include a 25 per cent levy on crude and refined vegetable oils, 16 per cent VAT on financial services, and an increase of excise duty on financial services from 15 to 20 per cent.
There is also a 2.5 per cent annual motor vehicle tax, and a bid to increase the cost of M-Pesa money transfer from 10 to 20 per cent.
This is a delicate situation that calls for some balance on what the government wants and what the people can do to keep body and soul together.
Any measures that are likely to drive struggling Kenyans into more suffering should be reviewed.
