Molo Constituency MP and Committee Chairperson Hon. Kuria Kimani. PHOTO/COURTESY

Curtains Fall on Public Participation on Finance Bill 2024

Local News

Curtains have fallen on the public participation exercise on the Finance Bill, 2024, with focus now shifting to the development of Departmental Committee on Finance and National Planning’s Report on the Bill for consideration by the National Assembly.


At the conclusion of a one-day public hearing on the Bill today, the Committee Chairperson Hon. Kuria Kimani (Molo) noted that the Members would now hold engagements with a number of government agencies over a raft of proposals made by the public in relation to some key proposals in the Bill.


Hon. Kimani told the Members of the public congregated at the Kenyatta International Convention Centre’s Amphitheater, that the Committee would engage these government agencies with a view to get their perspectives on a number of issues that have stood out during the public engagements on the Bill.


We have come to the end of the public participation exercise on the Finance Bill and we are now set to retreat to develop our report. However, before we do so, we are scheduled to meet a number of government ministers and the Attorney General to deliberate on some issues that the public pointed out in the Bill which relate to these government agencies”,

he stated.


Today’s public hearing saw the members of the public propose radical changes to a number of key provisions in the Bill. They include those on the proposed introduction of the Motor Vehicle Tax, Eco Levy, the proposed increase of excise duty on cigarettes, wines and spirits as well as the reclassification of bread to vatable status.


Making his contribution on the proposed Motor Vehicle Tax, Mungai Kihanya a columnist with a weekend newspaper, argued that though the proposed tax was a good idea, it was premised on a wrong footing.


“The Motor Vehicle Tax is a good idea, but badly conceived. This is because the proposed tax is a wealth tax. There’s something fundamentally wrong with taxing wealth when an asset is not changing hands”,

observed Kihanya.


He sought to propose a new way in which the tax could be collected.


“I propose that we change the way the tax is collected. Could the tax be collected every time a vehicle is transferred to a new owner and that the rate then be increased from 2.5% to 4% of the last insured value?”

he submitted.


Turning to the proposed imposition of the Eco Levy, Edwin Kamau , a first- year student at the University of Nairobi suggested that the levy be charged according to the rate of the car’s carbon emission.


He also urged that the Committee considers removing motorcycles from the definition of motor vehicle, to cushion the many young people operating in the sector to high taxation, yet they are just stating out life.


“ I want to urge this Committee to consider imposing the Eco Levy on the rate of carbon emission of one’s car. It is unfair to charge a flat rate yet the rate of environmental pollution is different”,

Kamau noted.


“ I further propose that you amend the definition of motor vehicle to exclude motorcycle from the imposition of the Motor Vehicle Tax”,

he added.


Weighing on to the Eco Levy debate, Mr. Rakesh representing Mini Max, posited that the proposed levy had set a blanket charge targeting a whole sector without considering that some plastic use is single use, and hence short term, while some plastic products would be in use for long and were therefore less destructive to the environment.


He called for the levy to be administered according to how detrimental the said products are to the environment.


Meanwhile, the Finance Bill, 2024 has been lauded for introducing international best practice in alcohol taxation.


Tony Eneh, the Executive Director, Africa Beer Group who is based in the United Kingdom, told the Committee that the imposition of excise duty based on the strength of the alcohol in the product is the international recommended best practice.


Eneh who urged the Committee to maintain the taxation provisions particularly the reduction of excise on beer in the Bill, noted that the practice had received a nod from the World Health Organization (WHO) and was recognized by the International Monetary Fund (IMF) and adopted by most OECD countries including the United Kingdom, Rwanda and Ghana.


The proposal for increased excise duty on cigarettes, wines and spirits also received support from youth groups who made oral presentations before the Committee, but for a different reason. They noted that imposing heavy taxation to these products would keep them out of reach for many youth and vulnerable groups.


The proposal to reclassify bread to vatable status also received varied viewpoints. While a number of those who made submissions to this proposal opposed the move, David Ouma, a nutritionist supported the imposed VAT on bread, adding that it would help Kenyans would turn to traditional foods which are more nutritious.


Bread is the poorest form of food ever embraced by Kenyans. As a scientist in the field of nutrition, I support the proposed imposition of VAT on bread as it has no nutritional value”,

he stated.


At the same time, youth representatives have called on the Committee to implement policies that will create a thriving business environment for the demographic, so as to expand the tax base.


Noting that the youth constitute almost 70 per cent of the country’s population, they observed that the country’s tax burden would lighten if more youth were engaged in activities earning them a modest wage, thus joining an expanded pool of taxpayers.


“Majority of Kenyans are youth. It is them that we should rely on to pay taxes. If we created policies that enable them to earn a decent living, we will expand our tax base thereby generate more revenue”,

Onesmus Misati, a resident of Nakuru County told the Committee.


The Committee also received views on other provisions of the Bill including one seeking to exempt imported parts used to manufacture wheel chairs locally, from duty.


David Wanderi a wheelchair technologist urged the legislators to consider exempting these parts from duty to make it easier for the disabled to afford wheelchairs.


After meeting the government agencies tomorrow, the Committee will retreat to generate its report which is expected to be tabled in the House, next week.

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