KENYA: Catholic Bishops in Kenya Decry Finance Bill 2024, Appeal Revisions to Protect the Vulnerable
Sr. Henriette Anne, FSSA
In a profound reflection on the state of the Nation in Kenya and the potential consequences of the Finance Bill 2024, the Kenya Conference of Catholic Bishops (KCCB) has issued an appeal to Government to consider the proposed legislation.
Citing the Biblical exhortation from Zechariah 7:10, “And do not oppress the widow or the orphan, the stranger or the poor; and do not devise evil in your hearts against one another”, they expressed their concern about the potential of increased hardship among Kenyans if the bill is enacted in its current form, stressing that the proposed measures in the Finance Bill 2024 will likely be oppressive and cause significant suffering among the citizens.
“It is our view that the Finance Bill 2024 if passed in its current form, will be oppressive and cause untold suffering among Kenyans”.
In a statement shared on 7th June 2024, they acknowledged the government’s need to generate revenue to fund public services and, at the same time, expressed their concern about the ongoing corruption and mismanagement of public resources.
“While we appreciate that the Government has a responsibility to raise taxes to support public services, we are deeply concerned about several proposed measures in the Bill aimed at raising revenue. Further, we are troubled by the entrenched corruption in our public institutions and the wastage of public resources on non-essential activities”.
Addressing the issue of corruption in their statement signed by Rev. Fr. James Waweru the Secretary General of KCCB, the bishops emphasized that combating corruption and eliminating the wastage of public resources could generate sufficient revenue to support essential services without burdening the already struggling citizens, reminding the government that they have the responsibility of to ensure that policies serve the common good and facilitate access to basic needs for all Kenyans.
“We observe that addressing corruption and halting the wastage of available resources would generate sufficient revenue to support essential services, thereby reducing the burden on Kenyans who are already struggling with a high cost of living. The government has a responsibility to ensure that the citizens enjoy basic needs by initiating policies that serve the common good of the nation”
After a thorough review of the Finance Bill 2024, the bishops have highlighted several critical issues that need urgent attention; starting with the basic commodities, bishops noted that the proposed Bill will impact basic commodities such as bread and in line with the social teaching of the Catholic Church, the bishops have rejected any legislation that will impoverish the already vulnerable segment of society.
“The Bill affects basic commodities such as bread, negatively impacting the poorest in our community. In the spirit of the Social Teaching of the Catholic Church, which emphasizes a preferential option for the poor, we reject any law that adversely affects the poor and impoverished”.
They further said that the introduction of a 2.5% on the value of motor vehicles is particularly burdensome in addition to already existing taxes, which will lead to increased public transport fares and higher operational costs for Small and Micro Enterprises (SMEs), questioning the necessity of the tax given the existing Road Maintenance Fuel Levy (RMFL) and fearing that it will further strain SME’s, reducing the ability to invest and grow.
“The Bill introduces a 2.5% tax on the value of motor vehicles. This new tax on already-owned vehicles, in addition to existing taxes, will burden the common person by increasing public transport fares. Although it could potentially improve tax collection and road infrastructure, we question which public service this tax will serve, given that the Kenya Roads Board already collects a Road Maintenance Fuel Levy (RMFL) at KShs. 8 per liter of petrol and diesel for road maintenance and development. This new tax will increase operational costs for Small and Micro Enterprises (SMEs), impacting their ability to invest in marketing, staff training, and equipment upgrades”.
The bishops also warned that the bill will undermine efforts to combat climate change stressing that newer fuel-efficient vehicles might prompt individuals and businesses to continue using older, less efficient models, counteracting environmental sustainability efforts.
“The Bill may inadvertently undermine efforts to combat climate change, as SMEs and individuals might revert to using older, less fuel-efficient vehicles to avoid higher taxes on newer, fuel-efficient, hybrid, and electric cars”.
In their collective statement, the prelates noted that the proposed increase in exercise duty from 15% to 20% and the imposition of VAT on mobile banking transactions are seen as regressive measures that will affect lower-income individuals, pushing them towards cash transactions and informal money storage methods which are less secure.
“The proposed increase in excise duty from 15% to 20% and VAT on mobile banking transactions will disproportionately affect lower-income customers, pushing them towards cash transactions and informal money storage methods”.
They continued, “Given the current economic challenges, it is our opinion that the proposed punitive taxes are likely to devastate the economy and impoverish the majority of Kenyans. It is regrettable that despite pleas to our leaders to implement measures to lower the cost of living and reduce suffering, a significant portion of tax revenues ends up in the pockets of a few well-connected individuals”, they lamented.
In conclusion, the members of KCCB urged the government to establish a tax regime that is predictable and conducive to economic growth, that can support, rather than stifle the private sector, and should not overburden the poor and vulnerable and at the same time appealing the Members of Parliament to listen to the voices of the people and revise the contentious clauses in the Finance Bill 2024.
“We therefore urge the government to establish a tax regime that is predictable a conducive to economic growth, rather than one that stifles the private sector and overburdens the poor and vulnerable. We are concerned that businesses a shutting down, relocating their manufacturing plants to other countries, and laying off employees. We urge our Members of Parliament to heed the people’s cries and revise the contentious clauses in the Finance Bill 2024”.
