Azimio la Umoja One Kenya Coalition Leader, Raila Odinga delivered a fierce denunciation of the Finance Bill 2024 on Friday, June 7, calling for drastic revisions to the proposed legislation.
Odinga condemned the Finance Bill 2024, arguing it exacerbates an already intolerable tax burden without improving public services.
“The tax burden in Kenya is at its highest level since independence, but public services have largely remained on their knees. As if this is not bad enough, the Finance Bill 2024 proposes even more and higher taxes. Consequently, the people and the country will be way worse off at this time in 2025 if the Finance Bill 2024 does not undergo radical surgery,” Odinga asserted.
Odinga lambasted the bill for failing fundamental taxation principles of predictability, simplicity, transparency, equity, administrative ease, and fairness.
“It is worse than the one of 2023, an investment killer and a huge millstone around the necks of millions of poor Kenyans who must have hoped that the tears they shed over taxes last year would see the government lessen the tax burden in 2024,” he declared.
Odinga, backed by President William Ruto’s government for the African Union Commission chairperson seat, did not hold back in his critique. He labelled the bill a “regressive taxation proposal that goes ruthlessly after the poor.”
According to him, if ratified, low-income Kenyans would face taxes on multiple fronts, resulting in them paying more than those with higher incomes.
“The Bill is a regressive taxation proposal that goes ruthlessly after the poor. Should it be ratified, low-income people will be hit with taxes on multiple fronts and will end up paying more than people with higher incomes. It is obvious that tax on basic necessities such as food, cooking oil and money transfer disproportionately hurt the poorest of the poor,” he noted
Odinga warned of the negative consequences of raising Import Declaration Fees from 2 per cent to 3 per cent, predicting increased costs of goods.
He also criticised the proposed Eco Levy on diapers, highlighting the disproportionate impact on the poor.
“In the Finance Bill 2024, insurance and reinsurance services are being removed from tax exempt status, to be subjected to 16 per cent tax. It affects every kind of insurance, from life to property to health to education. That could kill the already struggling insurance industry. The tax will kill an industry that is barely alive,” he stated.
He further condemned the proposed 2.5 per cent tax on motor vehicles, calling it “a perfect case of double taxation” and an example of “unfair and regressive taxation.”
Reflecting on last year's tax measures, Odinga noted, “The tax measures put in place last year and which led to violent protests have subjected Kenyans to a great deal of trauma but bore no fruit. The intended purpose of the 2023 tax measures were to help the government raise more revenue. Instead, the Kenya Revenue Authority consistently failed to meet targets. The high taxes on petroleum products occasioned a fall in the fuel levy raised. They led to closure and relocation of businesses.”
“The tax proposals for 2024 will make an already bad situation worse. They could usher the collapse of an economy that is already severely suffocated, and the poor will be the hardest hit,” he warned.
Odinga urged Parliament to implement “very radical surgery on the outrageous proposals in the Finance Bill 2024,” asserting, “We will not accept the mistakes and pains inflicted on Kenyans by the Finance Act 2023 to be continued into 2025 through Finance Bill 2024.”
Last year, the opposition, which Odinga leads, failed to stop the passing of the Finance Bill 2023, with 176 MPs voting in favour of the Bill while 81 voted against it. There were no abstentions.
