Opposition leader Raila Odinga has criticized the government for the proposals in the Finance Bill, 2024.
In a statement on Friday, Mr. Odinga condemned the Kenya Kwanza regime, calling the Bill retrogressive and insensitive to the plight of the poor, and stating that its impact would be worse than the Finance Bill, 2023.
Mr. Odinga highlighted the economic areas that would be affected by the proposed increase in taxes and Value Added Tax (VAT), arguing that ordinary Kenyans would face greater hardships than in the previous 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,” Raila added.
Mr. Odinga pointed out the new taxes on basic commodities such as bread, edible oil, mobile banking transactions, and sugarcane factories, stating that these would further burden Kenyans already struggling economically. He also criticized the eco levy proposed on manufactured products such as diapers, the 2.5 percent 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 percent 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 percent to 3 percent. The impact is that the cost of goods will go up.”
According to Mr. Odinga, the President William Ruto-led regime should learn from the Finance Bill, 2023. Despite imposing more taxes to raise the country’s revenues, the Kenya Revenue Authority (KRA) still fell short of its targets. He argued that revenues decreased as most businesses were forced to shut down due to high operation costs resulting from high fuel prices.
“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.