ACK diocese of Butere press statement on finance bill 2024

11th JUNE 2024
All members of KAMA and MU gathered here today, and the members of the press, we greet you in the name of our Lord Jesus Christ. Today in our meeting with the diocesan Kenya Anglican Mens Association (KAMA), our main lesson was based on the role of men and women in society as we reflected on the life of Cornelius, a centurion in the Italian Regiment in the book of Acts 10:1-2.
As one of our roles, we spent some time discussing the Finance Bill 2024, and we are happy to share our thoughts as follows:
We have seen the public make their views known to the members of the parliamentary committee on finance and national planning. Views from various sectors all point to the fact that the tax proposals contained in the Finance Bill 2024 are punitive to the taxpayer. We saw the same outcry in the run-up to the enactment of the Finance Bill 2023, but we notice that the bite will be more painful this year if the Finance Bill is enacted with most of those provisions left intact.
In 2023, we saw the enacted Finance Bill increase the cost of living and cost of doing business for enterprises, while the mwananchi was left with reduced disposable income, making it difficult for even basic survival. It is our sincere hope that the parliamentary committee will do the needful based on the feedback received and remove some of those provisions that will hurt the mwananchi more than be beneficial to him.
Instead of piling taxes on the taxpayer, it would have been more effective to address the issue of wastage and leakages in government. When you look around you see a government that is living large at the expense of the taxpayer. It is not logical to believe that you can achieve prosperity by increasing taxes if you do not seal the loopholes of wastage.
Some proposals in the Finance Bill 2023 should be reconsidered to safeguard the common man.
1. The proposal to introduce VAT on ordinary bread at a standard rate of 16% up from the current zero rate, will drive the price of bread out of reach for millions of Kenyans who rely on bread for breakfast. Bread is no longer a luxury but a basic necessity on the breakfast table for most Kenyans.
2. The proposal to introduce Excise Duty on both raw and refined vegetable oil at 25%. Analysis has shown that this will exponentially increase the cost of cooking oil by up to 80% of the current cost, which in addition will have a ripple effect on other products that use cooking oil (eg. bar soap, bread, mandazis, chapatis, chips, etc). These products will become unaffordable to millions of Kenyans.
3. The proposal to introduce VAT at a standard rate of 16% on financial services will increase the cost of financial services out of reach of most Kenyans, pulling back on the brilliant progress we have registered as a country in financial inclusion. Most Kenyans will resort to cash payments with the attendant risks of money laundering and even risk of theft of the cash etc.
4. The proposal to increase the Excise Duty rate on money transfer services from 15% to 20% will similarly push the cost of transferring money in Kenya too high with many customers resorting to cash transactions with the attendant risks of non-traceability, theft of the cash, fake and illicit cash in circulation. In fact, on the contrary, reducing the duty charged will make it affordable, increase the amounts transacted, and therefore collect more taxes than when the cost of transacting is too high. In 2023, more taxes were collected when the rate was reduced from 20% to 15%.
5. Introduction of motor vehicle tax at 2.5% of the motor vehicle value and to be collected at insurance cover renewal. This will push the cost of public transport up including matatus which most Kenyans use.
Linked to this, there is a significant risk that most Kenyans will resort to third-party insurance covers for their vehicles leaving a huge exposure on the value of the vehicle not covered by insurance, at a time when insurance penetration is still low compared to comparable markets.
We call upon the parliamentary committee responsible to do the right thing and delete these proposals that are contained in the Finance Bill, 2024.
We note that in a society like Kenya, the burden of providing for the family and putting food on the table falls squarely on the lap of a woman.
Any action that increases the cost of providing for the family is borne directly by a woman and puts the entire family at significant risk.
As the MPs make their recommendations, they should have the woman in mind as the ultimate victim of the tax measures being contemplated. Let the financial legislation consider the women who are the backbone of food security, playing a critical role in food production, household nutrition decisions, and childcare. It is our humble prayer that the government will listen to the plight of Kenyans most of whom are struggling with poverty and hunger which remain the greatest challenges for them.
Thank you, may God bless our beautiful nation, Kenya.
SIGNED
RT. REV. ROSE OKENO
DIOCESE OF BUTERE