The Law Society of Kenya (LSK) has issued a warning that President William Ruto’s proposed tax measures could undermine progress toward national equality. The LSK joins Raila Odinga, Safaricom, Amnesty International and the Kenya Women Parliamentarians in opposing the Finance Bill 2024.
LSK President Faith Odhiambo stated that additional tax burdens on lower-income Kenyans, who already face a high cost of living, would negatively impact their livelihoods and quality of life.
“This in itself is an antithesis to the national goals and objectives,” Odhiambo asserted.
The Finance Bill, 2024, seeks to expand the tax base and boost revenue collection from Kenyan citizens through various new tax measures. However, Odhiambo pointed out that these proposals seem to undo the exemptions and benefits introduced by the Finance Act, 2023.
“The Bill proposes to increase the excise duty rates applicable to telephone and internet data services, as well as money transfer services, from 15 percent to 20 percent. Notably, the Finance Act 2023 had previously reduced the excise duty on telephone and internet data services from 20 percent to 15 percent.”
Odhiambo also noted that the Bill suggests removing various tax reliefs established by the Finance Act 2023, particularly those related to electric vehicles, motorcycles, buses, and bicycles. She emphasized the importance of maintaining a stable tax regime in Kenya.
“Such stability is crucial for fostering an environment conducive to business operations and attracting foreign direct investment,” she explained.
Odhiambo expressed regret that the Bill includes provisions that would increase the cost of living for many Kenyans.
“The various proposals in the Bill will make life more expensive for a significant portion of the population, adding financial strain to already burdened households,” she highlighted.
Additionally, the Bill proposes increasing excise duty rates from 15 percent to 20 percent on fees charged for money transfer services by banks, money transfer agencies, and other financial service providers, as well as cellular phone providers.
“Once again, this proposal will have the effect of increasing the cost of living and will push many Kenyans to a cash-based economy,” Odhiambo warned.
Furthermore, Odhiambo raised concerns about sections of the Bill that pertain to the rule of law and its adherence by some entities. She specifically cited the proposal to exempt the Kenya Revenue Authority (KRA) from the provisions of the Data Protection Act 2019, which would allow access to personal data for tax assessment, enforcement, or collection without court orders or proper procedures.
“In our view, the proposed unlimited access to personal data, without court orders or proper procedures, will infringe upon taxpayers’ rights to privacy and poses a risk of data misuse. For this reason, we consider such a move unconstitutional and a violation of the rule of law,” Odhiambo concluded.
