Treasury Cabinet Secretary Njunguna Ndung'u has dismissed reports over the potential closure and relocation of companies owing to the Finance Bill 2024.
While addressing the media on Thursday, June 13, the CS described the concerns as hearsay and political agenda.
He maintained that the taxation among industries was balanced and would not cause the investors to relocate to other countries.
According to the CS, Kenya is still not at a point where taxes can force companies out of the Kenyan market.
"There is nothing like closing up or relocating. This is a political agenda. Everywhere you go, we try to balance out policies so that nobody feels disadvantaged. That is hearsay.
"In Kenya, we have not raised taxes to the point that firms can close down. I have been living in this country, I have done most of the policy work in my own individual capacity," he stated.
The CS made the remarks after companies, especially manufacturers, warned that the tax proposals in the Finance Bill 2024 would increase the cost of doing business.
Some companies noted that they would be seeking to relocate to other countries where taxation was more fairer.
“If implemented as is, the Finance Bill 2024 will increase the cost of production, thereby destroying industry’s competitiveness, and subsequently, dent our local and export markets, increase retail prices, burden Mwananchi, and increase cashflow requirement at a time when the environment is characterized by rising interest rates,” Kenya Association of Manufacturers (KAM) CEO Anthony Mwangi opined.
"Ultimately, this will render local industries uncompetitive which will push them to either downsize, move to more competitive countries or close down, as a last resort.”
The Finance Bill 2024 is seeking to introduce taxes such as the Eco Levy, and the 2.5 per cent Motor Vehicle Tax among others.
Coupled with existing taxes such as the Housing Levy, companies will be spending more money to pay taxes, a move that could see some of them reduce their workforce.
According to a survey done by the Central Bank of Kenya (CBK) among CEOs, over 240 bosses are planning to conduct mass layoffs within the next three months.
