As talks about the Kenya Finance Bill 2024/25 continue, Lucky, a student journalist, shares his thoughts. He explains what the new tax hikes could mean for businesses and everyday people. Read his article below and join the conversation to make your voice heard:
“I start this article today knowing that the government needs taxes from the citizens to enable development projects. Paying taxes is a duty that every Kenyan should fulfill and it is one of the best ways to show patriotism for your country. It is the right of the government to collect taxes and those who do not pay taxes must face legal consequences.
It is through taxation that the government can fulfill its promises made during campaigns, and provide the services and infrastructure that citizens need. Some proposals in the 2024/25 budget bill aim to increase the taxes levied on Kenyans. They introduce new types of taxes for goods that were previously untaxed and increase on other types of taxes.
It is not surprising or shocking, we have had enough surprises. The president and the entire government have reiterated several times that the taxes levied on Kenyans will be raised again and again. The President has repeatedly said that more is yet to come. As public opinions are being gathered about this bill, I have been keenly listening to some of the concerns raised by Kenyans.
Some industrialists, under the Kenya Association of Manufacturers, appeared before the parliamentary finance committee and made their views clear that this finance bill is a Tsunami. Due to the proposed tax increases, there is a risk that they will move to neighboring countries due to the increased cost of buying raw materials for their products. Some even mentioned Tanzania as their target country due to what they feel are policies that undermine them in Kenya.
They are now forced to pass this burden on to their Kenyan buyers, which burdens them, leading to a decline in their market. The best way for the government to ensure sufficient tax revenue for its projects is not by increasing the taxes levied on taxpayers. Doing so negatively affects the ability of business people and other investors, forcing them to close their businesses. Kenyans employed in these businesses lose their jobs. This means a decrease in tax revenues for Kenya Revenue Authority from these businesses.
Instead of increasing taxes on businesses and Kenyans in general, the government must focus on increasing the number of taxpayers through improving the business environment in the country and increasing the number of Kenyans with the ability to pay taxes.
The threats issued by manufacturers that they will move to other countries, and many of them have already done so due to the 2023/24 finance bill which is still being implemented, pose a significant threat to tax revenues collected in the country. Kenyans must be ready for this burden, which will be relieved if it is borne by more Kenyans and more people are brought into the tax net. There are issues with how the collected money is used.
“Are we really living within our means?” or are these just words put together and used to silence many Kenyans when it’s time for others to eat? When the President hires a private jet to travel at the expense of millions of taxpayers’ money, what other influence is needed to convince us that this government is really focused on fighting corruption?
The problem with taxes, I have said, is not collecting them but how they are used. So far, this government has not clearly shown why it aims to charge Kenyans more taxes. We must decide to deal with the consequences of losing investors in the country due to government’s failure to consider their interests. It is time we listen carefully when business people cry out; they are not crying for no reason.
We should listen carefully or else we will regret it”.
Lucky Jonnes is a student journalist at the Technical University of Kenya. Email at luckyjonnes2000@gmail.com
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