Taxing ‘hustlers’ more will make life harder
Trouble looms for most Kenyans. Judging from past experience, the proposed new taxes contained in the just-published Budget proposals will definitely be passed in the National Assembly and the Senate since the ruling Kenya Kwanza Alliance coalition has the numbers and will also pull in other lawmakers.
President William Ruto’s United Democratic Alliance (UDA) and its partners sold to voters a compelling narrative about empowering the "hustlers" during the August 2022 General Election campaigns. But since coming to power, the latter have found life extremely difficult with higher and new taxes and statutory deductions.
The cost of bread, mobile money transfers and airtime will shoot up if the proposed taxes in the 2024 Finance Bill are endorsed. This comes at a time when many Kenyans are reeling from the high cost of living. The National Treasury wants to introduce Value Added Tax (VAT) on bread and increase excise taxes on mobile money transactions, airtime and bank transfers as the government seeks to raise an additional Sh323 billion in taxes.
A16 per cent VAT on bread will increase by at least Sh10 the price of a 400-gramme loaf. Bread is among items—including flour, milk and sanitary products—that are zero-rated for VAT. The argument is that bread is a product for the middle class, which is misleading. It is, indeed, the most common breakfast item for all Kenyans, including the very poor.
The Bill also contains a new annual motor vehicle tax of Sh5,000 to Sh100,000 and an increase in the taxes levied on motorcycles. Motorcycles will cost more with 10 per cent excise tax, yet boda boda provide basic passenger and cargo transportation and create employment for the youth.
This is going to hit everyone pretty hard. The "hustlers", who mainly brought the KK government to power, are in for a raw deal. If, indeed, they are pro-people as they claim, the lawmakers should soberly debate and reject or favourably amend the proposals likely to adversely affect the suffering Kenyans.
