Kenyans have until May 20 to submit their views on President William Ruto’s proposed Tax plan, which was submitted as part of the Finance Bill to Parliament by the National Treasury last week.
The bill proposes changes to the Employment Act, that would allow a deduction of three percent from employees’ basic pay to fund Ruto’s low-cost housing plan.
However, this proposal has faced criticism from public sector trade unions. There is an argument that it will exhaust public sector workers who are already over-taxed.
“The Finance Bill 2023, if passed the way it is, will see total deductions of up to 22 percent of one’s monthly earnings, with the remaining 48 percent still subjected to 16 percent VAT of all goods and services bought, whose prices are ever increasing. The rising cost of living makes a public service employee a slave who cannot afford a decent life,” Secretary General Charles Mukhwaya read in a statement.
In response to this, the unions have threatened to call for industrial action if the proposals are enacted into law.
COTU Secretary General Francis Atwoli has urged caution in the government’s approach to tax hikes by stating that these measures could be counterproductive.
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The Azimio Coalition, spearheaded by Council Chairman Wycliffe Oparanya and Siaya Governor James Orengo, has taken a stand against the government’s incessant taxation that has been causing economic distress amongst Kenyans.
Oparanya, in his characteristic wit, warned that the excessive levies could trigger a mass uprising from the citizens. He also noted that the Kenya Kwanza government’s decision to remove subsidies was a contributing factor to the unbearable cost of living.
Saboti MP, Caleb Amisi, echoed the coalition’s sentiments, arguing that imposing taxes at a time when a majority of Kenyans are already grappling with economic difficulties is unjustifiable.
Azimio’s Oparanya warned that continued oppression of Kenyans could lead to civil unrest holding to the notion that there was no point squeezing blood from a stone. “If you keep on overburdening Kenyans, it will force the citizens to rise up,” he said.
“The Kenya Kwanza government removed the subsidies hence exposing citizens to the high cost of living,” he added.
The Finance Bill 2023 also proposes several taxes that will impact Kenya’s digital content creators and owners of platforms that facilitate the trading of digital assets. These include a 15 percent withholding tax on payments related to the monetization of digital content, which will significantly impact young people making a living in the digital space.
In addition to that, anyone receiving rental income on behalf of a premises owner will be required to deduct tax and set aside for the taxman within 24 hours.
Finally, the bill is seeking to introduce a tax on human hair, eyelashes, switches, and artificial nails. These beauty products have become increasingly popular in Kenya and this tax will result in an increase in their prices.
The Finance Bill 2023 has been met with mixed reactions from the public, with Kenyans facing concerns about the impact of the proposed taxes on various sectors of the economy.
Kenyans have been encouraged to submit their views on the bill before May 20, after which the government will determine the best way forward on the tax issue.
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