The Finance Bill, 2024, is contentious because it contains proposals that are going to worsen the cost of living.
Listening to different people, some of the proposals were unfair because they were not well conceived or were targeted at specific constituencies, for instance, introducing a motor vehicle tax through the Income Tax Act yet a motor vehicle cannot necessarily be a source of income.
The people who were going to be affected the most are those whom these costs are passed to – motor vehicle owners.
The others are the eco levy and the introduction of 16 per cent Value Added Tax on bread.
These proposals were going to have an implication on the economy in the sense that they would have affected the cost of doing business, which then is passed to mwananchi.
It is the most vulnerable people in society who usually suffer the most under such changes.
But, secondly, it also comes at a time the economy is contracted, in other words, the economy is not growing at a fast rate.
But when you look at the projections of moving revenue from Sh2.07 trillion this year to Sh3.02 trillion in the next financial year, when there is already a clear indication that even in the current financial year they are likely to miss the revenue target by almost Sh300 billion, we see it as being too aggressive.
The proposal that the finance committee is going to drop some of these taxes, and the Kenya Kwanza parliamentary group confirming that, is welcome. But, of course, what we are waiting to see is the report that will be tabled in the House.
The big implication is that these proposals were going to worsen the already dire cost of living. The taxes were going to push that cost of living further up.
So, the removal of these proposals is a relief. The question that begs an answer is where or how the government plans to plug the difference or whether the government is saying it is going to cut its budget.
International Budget Partnership country manager for Kenya spoke to Star
