National Assembly Speaker Moses Wetang'ula has challenged the accountants to advise the national government on how best to reduce the cost of living and public debt without excessive taxation.
Wetang’ula said the accountants, through their umbrella body the Institute of Certified Public Accountants, are allowed by law to advise the government on economic and financial matters.
Wetang’ula said the National Assembly Departmental Committee on Finance and National Planning is currently considering the Finance Bill, 2024.
The new Finance Bill has proposed a raft of amendments to various tax laws, which has attracted debate among Kenyans.
“This should be an area that the profession (accountants) should take a lead on in advising the committee on the implications of each of the proposed amendments to the tax law,” he said.
Speaking during the 41st ICPAK annual seminar in Mombasa on Tuesday, Wetang'ula said sound taxation laws are a catalyst for the economic development.
“Therefore, there is a need for the accountants to contribute and offer possible solutions on how best we can lower the cost of living for Kenyans and reduce public debt without heavy taxation,” he said.
At the same time, Wetang’ula said the Budget and Appropriations Committee of the National Assembly is also presently grappling with the deadlock that has arisen in determining the equitable share of revenue.
There is a dispute over the appropriate quantum to be allocated to counties, with the National Assembly proposing Sh391 billion and the Senate Sh415 billion.
This has been a recurring issue in each financial year, Wetang’ula said.
“The profession, which has many experts on economic matters, can advise on how the Legislature can create a balance between ensuring adequate financing of county governments amidst a tight fiscal environment. This would ensure that the objects of devolution as enshrined in the Constitution are realised,” he said.
He said the beginning point of the debate about the contribution of the accounting profession to the national growth and development of the country is all about professional integrity.
For instance, the country has been grappling with illicit financial flows in the form of tax evasion and avoidance that mainly occur through deliberate mis-invoicing, base erosion, and transfer pricing as perpetrated by multinational corporations.
“The vulnerabilities in the financial system are further compounded by the presence of a network of professional organisations and individuals who defy and exploit loopholes in both national and international laws to facilitate cross-border IFFs,” he said.
Perpetrators effectively rely on the assistance of experts and professionals like accountants to undertake and conceal these illegal practices.
The Speaker of the National Assembly said ICPAK is not effectively felt in the entire realm of public finance management, especially in enhancing efficiency in the utilisation of public resources.
“My challenge to the Institute is to take a centre stage in spearheading PFM reforms that provide the necessary safeguards during budget implementation to deal with challenges such as pending bills that continue to pose questions about the credibility of the budget implementation process,” he said.
ICPAK national chairman Philip Kakai said they have been at the forefront of ensuring that they enforce globally accepted accounting standards that facilitate transparency in Kenya.
He said professional accounting promotes the mobilisation of international investments, fosters investors’ confidence, reduces corruption and mismanagement of resources, and eliminates the practice of restructuring transactions and financial engineering.
In partnership with the Financial Reporting Centre and GIZ Kenya, the institute launched the Anti-Money Laundering Guide in October 2020 and has finalised a revised version.
They are preparing to launch next month in June.
“This guide is designed to reduce the possibility of the accounting profession being knowingly or unknowingly used for offences involving proceeds of crime, fraud, theft, or money laundering,” he said.
He added that ICPAK has developed an omnibus Financial Laws Amendment Bill and plans to introduce it to Parliament.
“This Bill seeks to amend various provisions in the different Acts of Parliament to seal the loopholes that allow corruption to penetrate the system. We will work closely with Parliament and the State Law Office to facilitate the enactment of this Bill,” he said.
ICPAK is also at the forefront of lobbying for the enactment of Whistleblower Protection Legislation, which, if enacted, will provide a framework and structure for increased whistleblowing, he said.