Finance Bill 2024, A Harsh Blow to Kenyans, Kenyan Consumers and Businesses

By Alvin Mwangi

This Finance bill has continued to unite Kenyans, of all walks of life, whether your rich or poor, Mama mboga, Boda boda and even that Bank manager that counts our money. While it remains important to raise money for the operation of a country, these proposals if they are to be approved will hurt all Kenyans from all walks of life.

Public participation process, a process that many Kenyans continue to question on its validity and usefulness. Even in the last Finance Bill 2023, which is an ACT now was passed with a lot of proposals that most Kenyans had said no to. Is public participation just a “tick the box” process to such vital processes?

Not just bread, that most Kenyans have been complaining about, things like cooking Oil, Banking and insurance services, Margarine, soap and jobs will be highly affected if the Finance bill 2024 is approved. While, we are being distracted by the bread tax, lets read the bill in its entirety.

The Finance Bill 2024, has stirred significant controversy and concern among consumers and businesses alike. Proposed by the government to enhance tax revenues and grant broader powers to the Kenya Revenue Authority (KRA), this bill comes with a slew of measures that could impose heavy financial burdens on the populace and stifle economic growth.

One of the most contentious aspects of the bill is the removal of Value Added Tax (VAT) exemptions on critical banking services. This move threatens to increase the cost of financial transactions for ordinary citizens and small businesses, further exacerbating the financial strain already felt by many due to the economic challenges of recent years.

Moreover, the proposal to maintain or increase excise duties on financial and telecom services adds insult to injury. With the cost of living already skyrocketing, such measures only serve to deepen the financial woes of Kenyan households and discourage investment and innovation in key sectors.

The introduction of a 20% excise duty on “other fees charged by financial institutions” is particularly concerning. This blanket tax could lead to a significant rise in the cost of financial services, making it harder for individuals and businesses to access essential banking facilities and credit.

Furthermore, the imposition of new taxes, such as the Significant Economic Presence Tax for foreign digital businesses and a minimum top-up tax for multinationals, threatens to deter foreign investment and innovation in the digital economy—a sector crucial for Kenya’s future prosperity.

The proposed eco levy, while ostensibly aimed at offsetting environmental damage, could further burden consumers by driving up the prices of goods deemed environmentally harmful. While environmental conservation is undoubtedly important, the burden of such levies should not disproportionately fall on the shoulders of already struggling consumers.

Equally alarming are the controversial changes outlined in the bill, including the removal of VAT exemptions on basic necessities like bread, the introduction of an annual tax on car value, and taxation on imported motorcycles. These measures not only risk exacerbating poverty and inequality but also run counter to efforts to promote affordable transport and mobility.

Perhaps most concerning of all are the new powers granted to the KRA, including the demand for the integration of electronic Tax Invoice Monitoring Systems (eTIMs) into invoicing and exemptions to data protection laws for tax purposes. Such measures raise serious concerns about privacy and civil liberties, potentially paving the way for abuse of power and infringement on individual rights.

Leaders need to be held accountable proposals that will continue to hurt Kenyans! Could we perhaps also start having discussions around reducing the wage bill and reduce on the luxurious life that we have accorded our leaders? Discussions around exempting KRA from the constraints of the Data Protection Act in accessing tax payers’ data should be done away with.

In conclusion, the Finance Bill 2024 represents a significant threat to the economic well-being and civil liberties of Kenyan citizens. Instead of fostering growth and prosperity, its proposed measures are likely to deepen inequality, hinder innovation, and erode trust in government institutions. It is imperative that lawmakers carefully reconsider these proposals and prioritize policies that promote equitable development and respect for individual rights.

Alvin Mwangi

Youth Activist

Nairobi, Kenya