Congress has been flooded with hundreds of public petitions against President William Ruto’s tax proposals, increasing pressure on lawmakers from the ruling coalition who are being whipped to pass the controversial bill.
Parliament has received at least 1,000 memorandums on the 2023 Finance Bill, of which 970 opposed the bill, sources said. As such, Kenya Kwanza will likely have a difficult task in getting the bill through the House of Representatives.
Parliamentary secretary Samuel Nyoroge said parliament had received 893 memorandums. These consisted of 756 submissions sent as emails or comments, and 137 substantive submissions made by various groups and individuals to the responsible committee.
But Nyoroge did not give a breakdown of those who opposed or supported the bill.
The proposal that attracted the most petitions was for raising the value-added tax (VAT) on petroleum from 8 percent to 16 percent. The proposed housing tax is fixed at 3 percent of an employee’s base salary. Likewise, income tax on those earning more than 500,000 lice will be raised to 35 percent.
Many petitioners have also rejected proposals such as the obligation to deposit securities worth 20 percent of the tax amount in dispute before appealing the tax judgment.
Many also rejected agency tax proposals such as withholding tax, excise tax on gaming and gambling earnings, and withholding VAT that is promptly remitted to the Kenya Revenue Authority (KRA).
Since Monday, the Finance and National Planning Commission has conducted public participation through meetings of various stakeholders and listened to their concerns about the bill.
Parliamentary Deputy Majority Leader Owen Baya yesterday downplayed stakeholder criticism, saying only businesses were opposed to the new tax.
“Actually, most businesses will oppose the bill and agitate the public because they don’t want to pay taxes,” Baya said.
In a memorandum obtained by Sunday Nation, the sender opposed most of the proposals contained in the bill.
The Anglican Church of Kenya, through Archbishop Jackson Ole Sapit, said the new tax system would burden the majority of Kenyans. It calls for thorough public scrutiny of the proposal before it is submitted to Congress.
The East African Petroleum Institute (Piea) warned in a memorandum to parliament that raising the value-added tax to 16% from the current 8% would lead to an increase in fuel costs of 12.56 and 12.76 shillings per liter of diesel. . This could have “disastrous” ripple effects in other parts of the economy.
“Rising fuel costs and consequent production costs could lead to higher commodity prices in the Kenyan market, which could have a negative impact on the cost of living … It would also have a negative impact politically,” Pieria said. Warning.
Piea is a specialist agency for the oil and gas industry in the East African region. It claims that diesel and gasoline are essential commodities for Kenya’s economy.
Pierea also opposes proposals to abolish the 8% VAT on liquefied petroleum gas (LPG), thereby making the product tax-free. The report suggests that the exemption also passes some costs on to consumers, so gas should be rated zero instead.
“This exemption means that VAT cannot be claimed on costs directly attributable to the supply of LPG and must be expensed, as traders would pass on the high VAT to consumers. , undermines the desired effect of making LPG affordable,” says Pierre.
Regarding the revision of Article 32 of the Tax Adjudication Act, which states that parties must deposit 20 percent of disputed taxes before issuing a judgment on appeal to the High Court, Pierre said the proposal does not include provisions for paying money. It said it would have a negative impact on taxpayers’ cash flows. The trial could drag on for years, so it would earn interest while it was in the hands of the chief.
The Kenya Aviation Pilots Association (Kalpa) also opposes a 3% housing tax. Most of the members claim to have already secured housing.
“Significant information about national development projects remains unavailable, leaving members ignorant of project details that motivate them to fund projects,” Kalpa added.
The bill would make mandatory contributions to the National Housing Development Fund by both employers and employees to be 3% of an employee’s basic salary, provided that the total employee contribution does not exceed 5,000 shillings per month. is suggesting.
“We are proposing a voluntary, but not compulsory, 3% housing tax for workers who want to own a home under government programs,” Kalpa said.
The group argues that if the government wants to implement the program, it should first collapse other existing housing schemes.
“Workers’ salaries haven’t been raised in years, yet the government is insensitive to high inflation on basic goods and wants to squeeze their take home even further,” he added.
The association argues that Kenya’s Kwanzaa government should focus on combating corruption as a way to raise revenues, rather than overtax workers, given rampant and rampant corruption in the government.
The Surveying Society also opposes the housing tax, arguing that compulsory deductions reduce personal disposable income.
The institute says housing is necessary but shouldn’t be forced on people.
The institute also objected to the provision that anyone receiving rental income on behalf of a building owner must deduct it and remit it within 24 hours, saying it is not practical.
CPA’s are also against the housing tax, arguing that contributions should be voluntary.
Accountants also opposed a proposal to change the withholding VAT payment deadline from the current 20 days to three days after deduction, and taxpayers appointed as withholding VAT officers would He said that he would bear the administrative burden of ensuring that the tax he paid was paid in a timely manner. manner.
“A three-day schedule is so short that it poses a compliance risk,” the accountants say.
The Kenya Marketing Association also opposes the bill, particularly the introduction of a 15 percent withholding tax on digital content production.
They call it discriminatory.
“The 15% withholding rate for digital content creation compared to 5% for other professionals is discriminatory and punitive,” the association said in its memorandum.
The association also said the bill does not specify the threshold for taxable income earned by digital content producers.
The Kenya Tobacco Control Alliance also expressed concern that the finance bill will not raise excise taxes on tobacco and nicotine products for the first time. It will be a nuisance for omission of description.
Newly rebranded Ports Sacco, through CEO Dedan Ondieki, said it needed to strike a balance to ensure that the majority of voices were reflected in the bill.
One of the strategies of the opposition party Azimio La Umoja to scrap the bill is to use a key memorandum submitted to parliament to force Kenyan Kwanzaa to make amendments.
“We’re going to ask the people of Kwanzaa, Kenya, in the House of Commons: If the Kenyans reject this bill, who can say yes and go against what Congress is supposed to uphold?” Deputy Minority Robert Mbui Raised leaders.
The parliamentary majority leader, Kimani Ichunwa, spoke in Naivasha during the annual parliamentary symposium and promised the Kenyan public that all opinions gathered during public participation will be taken into account.
