Interest groups raise concern over Ruto’s plan for new taxes
The government is salvaging some provisions of the shelved Finance Bill amid questions about why similar efforts are not being directed to the implementation of court-ordered tax reliefs like reduced VAT on fuel and road levy.
Tactically, perhaps wary of public backslash, the government has begun by rescuing proposals in the withdrawn Finance Bill, 2024, that are people-friendly.
However, interest groups, on the back of the President’s latest utterances, have protested more potent provisions will be inserted in upcoming legislation.
Just 14 days after President Ruto was forced to reject his controversial Finance Bill that sought to raise Sh346 billion new tax revenue, National Assembly Majority Leader Kimani Ichung’wah moved to Parliament with new legislation.
The Kikuyu MP tabled the Kenya Revenue Authority (Amendment) Bill, 2024 that seeks to give the Cabinet Secretary for the National Treasury powers to waive penalties and interest on tax agents that fail to disburse collected tax to the State’s coffers in time.
“The Cabinet Secretary may waive part of the whole of the penalty under subsection (3), where the person has transferred the funds to the Central Bank in full,” the Bill reads in part.
Interestingly, this was one of the proposals that were contained in the Bill – introduced during the third reading – that was rejected by the President following deadly youth-led protests across the country.
Read: I’ll reinstate ‘progressive’ parts of rejected Finance Bill, 2024, says Treasury CS John Mbadi
Last week, National Treasury Cabinet Secretary John Mbadi said the government would re-introduce some of the provisions in the rejected Bill, particularly those relating to tax expenditures and the tax amnesty programme.
“I will just mention those two (reducing tax expenditures and extension of tax amnesty). But I know our team around here is working on some of those proposals that were in the Finance Bill 2024 which we can now put together and see how to take them to Parliament, not as Finance Bill but as other proposals,” said Mr Mbadi.
While Mr Mbadi said the tax proposals that will be reintroduced are largely those that will benefit taxpayers, the move could give the government an avenue to reintroduce some of the more contentious provisions that would further increase the cost of living and doing business.
Indeed, on Saturday, President Ruto did not mince words about his resolve to reintroduce the tax measures.
While on a development projects tour of Kakamega County, the President likened himself to a relentless parent who does not give up when the family experiences a stillbirth.
“Let me ask you, if you were planning to have a child (and you get a stillbirth), do you give up? Don’t you go back to try again? I have told Malulu (Malava MP Malulu Injendi) and our MPs that we will go to Parliament and plan again,” President Ruto said.
The Head of State said the rejection of the Finance Bill, 2024 jostled his plan to allocate Sh130 billion on development projects particularly building and upgrading roads.
Read: John Mbadi – This is how I will fix President William Ruto economy
But some stakeholders have vowed to oppose the reintroduction of some of the punitive tax measures that collapsed with the Bill.
The Electric Mobility Association of Kenya (Emak), a lobby group for electric vehicles and allied manufacturers, has said the revival of the tax proposals that targeted the sector will derail the uptake of EVs.
The Finance Bill, 2024 proposed to introduce the 16 per cent VAT on electric motorcycles, solar and lithium-ion batteries, electric buses and ended VAT exemption on equipment used for generating wind and solar power.
According to Emak President Hesborn Mose, the taxes will make EVs more expensive and derail the e-mobility momentum.
“Currently, the cost of EVs are between 10-15 per cent more expensive than ICE (Internal Combustion Engine) vehicles. If you add the proposed VAT and excise taxes, the cost of EVs will be up to 35 per cent higher than ICE vehicles,” said Mr Mose.
He added that while the sector received investment totaling $100 million (Sh13 billion) last year, increased taxation will deter from investing in the sector.
“Between 2022 and 2023, we saw a 500 per cent growth in the uptake of electric motorcycles due to incentives. Removing these incentives will reserve this growth and affect jobs across the value chain,” said Mr Mose.
Read: Njuguna Ndung’u – Kibaki-era economist whose theories never found practice in Ruto government
The government’s push to reinstate the contentious tax measures comes at a time Kenyans are already paying more for key products, especially because State officials are refusing to comply with the law.
For instance, the government, through the Energy and Petroleum Regulatory Authority (Epra), has maintained the 16 per cent Value Added Tax (VAT) on fuel.
This is despite a Court of Appeal decision that rendered the Finance Act, 2023, which doubled VAT on the product from 8 per cent, unconstitutional.
Further, despite strong views expressed by the public against the review of the Road Maintenance Levy Fund (Imposition of Levy) Order, 2016, the government went ahead last month and increased the levy by Sh7 per litre to Sh25 up from Sh18. The courts have since suspended the additional charges.
These two charges have raised the cost of fuel for Kenyans, which has had ramifications on other costs including transportation, agriculture, power generation and manufacturing.
Kenyans should also expect higher food prices following a decision by the Agriculture and Food Authority (AFA) to go ahead to implement the introduction of a 2 per cent levy on imported food products such as maize and rice shipped into the country.
This is despite protests by traders who have opposed the move arguing that it will make the cost of doing business and therefore retail prices more expensive.
bambani@ke.nationmedia.com
Shows
See AllAM Live
AM Live is NTV's morning current affairs show that sets the agenda for the day with insightful panels every weekday.
Business Redefined
Business Redefined is Kenya’s premier thought leadership platform for unpacking matters regarding economic and finance policy as well demystifying complex developments in the region’s capital markets.
Comedies
A collection of our premium content. Diam curabitur vehicula A collection of our premium content. Diam curabitur vehicula
Documentaries
A collection of our premium content. Diam curabitur vehicula A collection of our premium content. Diam curabitur vehicula
Entertainment
A collection of our premium content. Diam curabitur vehicula A collection of our premium content. Diam curabitur vehicula
Full Episodes
A collection of our premium content. Diam curabitur vehicula A collection of our premium content. Diam curabitur vehicula
Gumzo La Sato
Gumzo La Sato is a live social issues show that aims to create awareness about issues affecting the larger society. The discussions range from Parenting, Marital bliss and struggles, Oppression, violence, and all matters of the Heart.
Health Diary
Health Diary is a weekly show that highlights different types of diseases/conditions and seeks ways to prevent, treat/manage them. The show debunks this through real life stories and also feature specialists in different fields, to offer medical advice on the same.
Letter To My Younger Self
Letter To My Younger Self is a podcast where guests get to write a letter to their younger self, from which Maxine formulates questions to ask them during the hour-long show.
Nation Reports
Nation Reports is a weekly podcast offers an opportunity for listeners to interact with various reporters and journey with them as they unravel the biggest most emotive stories.
One Health Lens Podcast
Discussing health matters and human stories from Kenya and across Africa. We talk big picture from people to policy, ecosystems, and everything in between. Follow us on LinkedIn: https://www.linkedin.com/company/onehealthlens
Paradise Lost
Paradise Lost peeks through the story of Louis Otieno, the times, and everything in between.
Primetime
A collection of our premium content. Diam curabitur vehicula A collection of our premium content. Diam curabitur vehicula
Speaking of GEN Z
Speaking of Gen Z brings you entertaining but meaningful conversations about a generation that is trying to navigate through adulthood. Join hosts Michelle, Jackie and Esther as they unravel all things Gen Z.
Sport On
Sport-On is a 30-minute sports magazine show on NTV and 3 hours on NATION FM. The show seeks to give the sports “fanatics” and “funatics” comprehensive and in-depth coverage of sports both locally and internationally.
Tech-over
The extent of technological growth is beyond mere acknowledgment; it has seamlessly integrated into our daily existence. A few years ago, the notion of paying electricity bills through mobile money or recharging with 'tokens' in Kenya seemed inconceivable. Online product sales were considered distant, and artificial intelligence is rapidly reshaping various facets of our lives. Amidst these technological leaps, those with a solid understanding of tech can navigate challenges, seize opportunities, and build a sustainable livelihood. Tech over Show aims to be the platform facilitating discussions among thought leaders, innovators, tech companies, and the government, addressing challenges and opportunities in Kenya's thriving tech industry.
Thamani
Thamani is a business show which is dedicated to emerging issues regarding micro, small and medium size businesses.
The Politalk podcast
This is The Politalk podcast. Here we look into the ins and outs of everything Kenyan politics. We pull no punches and have no reason to sugarcoat anything that matters to Kenyans.
The Trend
A two-hour-long live show that airs on Fridays. The show focuses on what is current in the entertainment industry, controversial and popular across all media platforms targeting those aged between 25 and 35 years.
The trend podcast
The trend podcast highlights and captures the best of banter from #TTTT segment that airs every Friday on NTV. It's the TTTT EXTRA
The Wicked Edition
The Wicked Edition with Dr. King’ori seeks to address serious issues through humour and relatable wit. It is a two-part half hour show filmed in front of a live audience
Trending
A collection of our premium content. Diam curabitur vehicula A collection of our premium content. Diam curabitur vehicula
Twende
Twende is a travel show that highlights beautiful, unique, diverse locations, people, and cultures. The show offers fresh perspectives on familiar locations and memorable experiences in new ones.
Unscripted
This Saturday evening lifestyle show lets viewers share their stories and life experiences as openly & honestly for the purpose of shifting the culture of silence.
VIP Access
VIP ACCESS is Anyiko Owoko’s YouTube and podcast show on Music and Culture dedicated to promoting Africa’s most promising talent and creatives. This podcast grants you VIP access into timeless interviews while providing a platform for rising as well as established artists across the continent. Since launching in 2018, Anyiko has interviewed over 70 African music stars.
WADR
This weekly news show aims to have all sides of debate but not be constrained by it, listen to main voices in the contest but not allow them to hold the viewers hostage, entertain debate but allow push back with all due respect.
When death do us part
In this podcast, three widowers openly speak about the process of grief, how they found themselves exposed to the emotional turmoil of losing their wives, and how society still does not know how to deal with them.
Your World
Your World is a health, wellness and variety show. It provides a platform for audiences and experts to share their experiences on how to improve or manage health issues, across Kenya and the Africa region.