We, the Okoa Uchumi Campaign partners and citizens from different parts of Kenya dedicated to
strengthening public participation and social accountability in the public debt process are deeply
concerned by the Government’s recently released estimated budget for the 2024/25 FY and the
Finance Bill 2024.
The current trajectory of rising taxes poses a dire threat to citizens' access to vital services, essential
for the full realization of their fundamental rights and freedoms. As staunch advocates for human
rights and the interests of marginalised members of society, we express profound concern over
the escalating cost of living, compounded by punitive, unattainable, and unpredictable tax policies.
It is deeply troubling to witness significant budget reductions averaging 11% in critical sectors such
as education, research, social protection, disaster response, and agriculture. Meanwhile, certain
Ministries, Departments, and Agencies (MDAs) within the executive are experiencing budget
expansions. This imbalance not only jeopardizes the well-being of citizens but also undermines
the government's duty to prioritize essential services that uphold the dignity and prosperity of all
individuals.
Whereas, Article 10 of the Constitution identifies public participation as one of the fundamental
principles of good governance, it is very disappointing to be invited to a tokenistic, meaningless
and exclusive public participation exercise as currently conducted by the government. It is a
worrying trend that citizens' voices do not find their way into the final policies approved by
parliament despite being invited to give their opinions. It is this very Hon Kuria-led-committee
that rejected over 63% (Twaweza EA, CFA Report 2023) of citizens' views on the Finance Act
2023 and once again we are staring at an exercise that is meant to tick boxes. Further, there has
been no deliberate efforts by parliament to allocate sufficient resources to facilitate constituency-based all-inclusive public participation to afford Kenyans from all walks of life an opportunity to
share their opinions and views. Without addressing the teething problems bedevilling our public
participation framework and total disregard of public opinions by the parliament, Kenyans will
continue to be taken for a ride and their rights violated with impunity.
The Finance Bill, 2024
The non-citizen-focused budget is proposed to be financed by increased taxes to Kenyan taxpayers
without commensurate investment in apt service delivery; thus, the burden on Kenyans is set to
further worsen if the Finance Bill, 2024 is passed into law. The Finance Bill, 2024 proposes unfair,
unjust and harsh clauses which will be to the detriment of the common mwananchi. The Bill is keen
to impose heavy tax burdens on the common mwananchi by attacking every aspect of their lives,
from the food they eat for health and spiritual communion, to the cars they use to travel either as
commuters or owners, the communication sector that is a major source of social cohesion and
health, and the banking sector, particularly mobile banking, that drives most economic
transactions in Kenya. A Kenyan taxpayer is staring at a short, miserable life with a raft of
violations from the government.
Despite the government’s elaborate plans to increase the tax burden, they have not reciprocated
the same energy towards the fight against revenue leakages through corruption, wastage, illicit
trade and money laundering. According to the Ethics and Anti-Corruption Commission, Kenya
loses Ksh. 608 billion/= (7.8% of the country's GDP) to corruption annually. The Corruption
perception index 2023 places Kenya at a score of 31/100, which shows deterioration in the Kenya
anti-corruption efforts. It is under this premise that the Okoa Uchumi asserts that continued
taxation without accountability is extortion. An attempt by the government to meet its debt
obligations, some of which are odious debt and hence not legitimate and should not be a burden
to the citizens. The coalition members, oppose a number of the proposals that are problematic
and inconsiderate of the current economic situation as follows:
- Enshrining a proposal exempting KRA from the constraints of the Data Protection Act in
accessing taxpayers’ data. This is a flagrant violation of one’s right to privacy as set out
under Article 24 (2) of the Constitution of Kenya, 2010. There are high chances of
surveillance for taxation purposes to be used for persecution. - Proposal to remove gluten bread and unleavened bread from VAT while also removing
VAT zero rating on the supply of ordinary bread, milk, cream and all inputs and raw
materials produced both locally and imported. This is bound to increase these items' costs,
and the majority will not be able to afford them. This will be an abuse of the government's
duty to ensure that food is available and accessible. A clear violation of the right to food. - Proposals to introduce a tax on motor vehicles at 2.5% of the value of the vehicle. The
implication of this is that it is likely to increase the tax burden of citizens. This tax is
problematic because it is not progressive in nature because the minimum tax payable will
be Kshs. 5000 hence owners whose cars are less than Kshs. 200,000 will pay more than
2.5% of the value of their vehicles. On the other hand, those whose vehicles are more than
Kshs. 4,000,000 will pay a lower tax rate since this tax is capped at Kshs.100,000. This tax
is unjust and burdensome to middle and low-income earners. - The proposal to empower KRA to require taxpayers to integrate eTIMS. Failure to comply
with this requirement will result in a monthly penalty not exceeding Kshs. 2 million. This
will mainly target and hurt small businesses since large businesses are already integrated
with KRA systems. - The proposal is to increase the import declaration fee from 2.5% to 3%, which will increase
the cost of imported goods. - Proposal to increase the excise on telephone and internet data services. This comes at a
time when the government declared its support for the digital world. Imposing such a tax
will hinder many from accessing information purposes such as education and current
affairs and will also impact the ease of communication.
We wish to highlight and bring to attention the negative effects that the budget estimates for the
2024/25 FY and the Finance Bill, 2024 will have on public service delivery, and the economy at
large. The protest on some proposals of the Finance Bill 2024 are grounds to show that Kenyans
can shape the fiscal discourse in our country as provided for in our Public Finance Management
Act, 2012 and the Constitution of Kenya. We desire to see a country where accountability is highly
valued and where talks on fiscal consolidation are led by the Executive and the Legislature in a
manner that is dignified, justified and takes into account the welfare of an ordinary Kenyan
Taxpayer.
The government should explore alternative measures to meet its revenue collection and stop
overtaxing citizens and businesses. We urge Members of Parliament to reject the proposals that
seek to overtax the already suffering Kenyan. Efforts should also be directed to tax compliance on
the existing taxes and a pursuit for accountability of all revenue collected. Further, the government
must demonstrate by deed that it is committed to fight corruption, wastage and illicit financial
flows.
Based on this, Okoa Uchumi will continue amplifying their proposals as submitted to parliament
by the people. Additionally, the campaign will mobilise all Kenyan citizens to inform their
members of Parliament on their stand on the finance bill 2024.
Sincerely,
The undersigned Okoa Uchumi Campaign Members:
1. ActionAid International Kenya
2. African Forum and Network on Debt and Development (AFRODAD)
3. Amnesty International Kenya
4. Bunge Mashinani School of Governance
5. Centre for Fiscal Affairs
6. Centre for Economic Governance (CEG)
7. Centre for Enhancing Democracy and Good Governance (CEDGG)
8. Christian Aid Kenya
9. Community Advocacy and Awareness Trust (CRAWN Trust)
10. EACHRights
11. East Africa Tax and Governance Network
12. Fight Inequality Alliance Kenya
13. IBON Africa
14. Institute of Public Finance
15. International Budget Partnership Kenya (IBPK)
16. Inuka Kenya Ni Sisi!
17. Katiba Institute
18. Kenya Human Rights Commission (KHRC)