- Moi said Kenyans' hope solely lies on the National Assembly to amend the Bill to alleviate the burden of over-taxation.
- “Government must shift its focus from taxation to industrialisation through manufacturing to achieve sustainable, private-sector-led economic growth.”
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Kanu party leader Gideon Moi has warned that the Finance Bill, 2024 will condemn more Kenyans into poverty if the tax proposals are not revised.
The former Baringo senator on Tuesday noted that economic experts, think tanks and the general public have highlighted the pain points in the Bill, cautioning that, if enacted in its current form, it will disproportionately diminish Kenyans’ purchasing power by raiding their disposable incomes.
“Therefore, the National Assembly Finance and Planning Committee must ensure that its final report reflects the opinions, concerns, and aspirations of Kenyans on the Bill,” he said.
He said Kenyans' hope solely lies on the National Assembly to amend the Bill to alleviate the burden of over-taxation.
In a statement, Moi said the committee has an opportunity 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 the government’s approach to aggressively exact tax beyond the point of elasticity during an economic downturn will inevitably reduce the tax revenue.
“The Finance Bill, 2024 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 explained.
Moi pointed out the proposal to impose excise duty and VAT on essential financial services which he said contradicts the country’s goal of financial inclusion to combat poverty and inequality.
“Many Kenyans rely on services like Mpesa to transfer money to their dependents for their basic needs. It is a dent in our national conscience to erroneously treat these transfers as taxable incomes,” he added.
He further added that the motor vehicle circulation tax, in addition to constituting double taxation, mandates insurance companies to collect this highly unpopular tax with penalties for non-compliance.
“It is a no-brainer that its administration will de-incentivise the insurance sector, discourage comprehensive insurance uptake, and push car owners to third-party insurance,” he warned.
Moi added that it must also not be lost that starvation and malnutrition still afflict many people, especially children.
He said increasing taxes on basic household food items like bread will inevitably compound these problems.
He advised that the government must shift its focus from taxation to industrialisation through manufacturing to achieve sustainable, private-sector-led economic growth.
“With value addition, more jobs will be created across the value chain, reducing unemployment and creating more incomes, effectively expanding the tax base and increasing tax revenue to fund public programmes,” he explained.
He said the government must embark on improving the ease of doing business, simplifying tax regimes, and combatting public-sector corruption.