By Muthoni Maina
In a recent press statement, Hon. Gideon Moi, the Chairman of the Kenya African National Union (KANU) party, has expressed significant concerns regarding the Finance Bill, 2024, currently under consideration in Kenya.
Gideon Moi warned that the proposed tax measures proposed in the bill could have severe repercussions on individuals, households, and businesses, particularly amid challenging economic times.
“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, affecting livelihoods, and driving businesses out of the economy,” read the statement in part.
The Finance Bill, as it stands, has faced criticism for its punitive tax proposals, which Gideon Moi argues could further plunge Kenyans into poverty.
Of particular concern is the lack of adequate public participation in the formulation of the bill.
Gideon Moi stressed on the need for the National Assembly Finance and Planning Committee to heed the voices of Kenyans and ensure that their opinions, concerns, and aspirations are reflected in the final report.
Moi underscored the importance of sustainable taxation frameworks, emphasizing the role of a favourable business environment in fostering economic growth and expanding the tax base.
He proposed a shift in focus towards industrialization through manufacturing, arguing that value addition and job creation across the value chain would not only reduce unemployment but also broaden the tax revenue base.
Furthermore, Gideon criticized specific provisions in the bill, such as the proposal to impose excise duty and VAT on essential financial services, which he believes contradicts the country’s goal of financial inclusion.
He additionally raised concerns about the motor vehicle circulation tax, highlighting its potential to discourage comprehensive insurance uptake and hinder the growth of the insurance sector.
“Ultimately, the Finance Bill will be self-defeatist as evidenced in the National Treasury’s report in May that KRA fell short of its projected tax revenue collections,” Gideon added.
In light of these concerns, Moi called upon the government to prioritize the revision of the Finance Bill to alleviate the burden of over-taxation on Kenyans.
He emphasized on the need for a concerted effort to improve the ease of doing business, simplify tax regimes, and combat public-sector corruption to stimulate economic growth and attract foreign investment.
As Kenyans await further deliberations on the Finance Bill, Hon. Gideon Moi’s call for a more balanced approach to taxation and economic development resonates strongly, underscoring the importance of ensuring that fiscal policies are aligned with the nation’s long-term economic objectives.