ODM leader Raila Odinga criticized the government over the proposals contained in Finance Bill, 2024.
Odinga termed the Bill as retrogressive and insensitive to the plight of the poor in the country, reiterating that its impacts will be worse than Finance Bill, 2023.
He cited the economic areas which would be affected by the proposed increase of taxes and Value Added Tax (VAT) saying ordinary Kenyans will be subjected to hardships worse than in the last financial year.
“The Bill is a regressive taxation proposal that goes ruthlessly after the poor. Should it be ratified, low-income people will be hit with taxes on multiple fronts and will end up paying more than people with higher incomes. It is obvious that tax on basic necessities such as food, cooking oil and money transfer disproportionately hurt the poorest of the poor,” he said.
“The tax burden in Kenya is at its highest level since independence, but public services have largely remained on their knees. As if this is not bad enough the Finance Bill 2024 proposes even more and higher taxes. Consequently, the people and the country will be way worse off at this time in 2025 if the Finance Bill 2024 does not undergo a radical surgery. Most of the tax proposals in the Finance Bill 2024 are as insensitive as they are callous.”
Odinga cited the new taxes imposed on basic commodities such as bread, edible oil, mobile banking transactions and sugarcane factories reaffirming that the same would subject Kenyans who are already hurting economically to more pain.
He also touched on the negative impact of the eco levy which is proposed to be imposed on manufactured products such as diapers, the 2.5 per cent tax on motor vehicles and new taxes on insurance and reinsurance services.
“The government is trying to make it more costly for people to send and receive money by phone and at the same time trying to kill remittances from the diaspora…When the government imposes a 25 per cent excise duty on edible oil as is being proposed in the Finance Bill 2024, the cost of cooked food, including those served in kibandas and kiosks that are the refuge of millions of casual workers will rise,” he stated.
“We see no positive result that the country which is a net importer of nearly everything can derive from the proposal to raise import declaration fees from 2 per cent to 3 per cent. The impact is that the cost of goods will go up.”
He said the government ought to learn from Finance Bill, 2023 which he says despite slapping Kenyans with more taxes in the name of raising the country’s revenues, the Kenya Revenue Authority (KRA) still fell short of its targets.
He said the revenues decreased since most businesses were forced to shut down due to high operation costs resulting from high prices of fuel.
“It must be remembered that the tax measures put in place last year and which led to violent protests have subjected Kenyans to a great deal of trauma but bore no fruit. The intended purpose of the 2023 tax measures was to help the government raise more revenue,” he said.
“Instead, the Kenya Revenue Authority consistently failed to meet targets. The high taxes on petroleum products occasioned a fall on the fuel levy raised. They led to closure and relocation of businesses.”
Mr. Odinga thus advised the current administration to reconsider its tax proposals warning that Finance Bill, 2024 may lead to the collapse of the country’s economy.
He implored Members of Parliament to shoot down the Bill when it is tabled in Parliament in a bid to save Kenyans.
“If we expect businesses to invest in Kenya, then we cannot afford a tax policy to shoot up and down and keep swinging like a pendulum. We equally cannot afford taxation measures whose end result is to inflict more pain on the poor who expect relief… The tax proposals for 2024 will make an already bad situation worse. They could usher the collapse of an economy that is already severely suffocated and the poor will be the hardest hit,” he noted.
“Parliament must therefore inject very radical surgery on the outrageous proposals in the Finance Bill 2024. We will not accept the mistakes and pains inflicted on Kenyans by the Finance Act 2023 to be continued into 2025 through Finance Bill 2024.”
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