The government is yet to adequately tackle pilferage and misuse of public resources to warrant an increase in the taxation, players in the civil society have warned.
The CSOs under the umbrella of Okoa Uchumi now want the state to review its expenditure before implementing the new taxation proposals in the Finance Bill 2023.
According to the CSOs the government will gain more by plugging leaking in various revenue streams and cutting down on expenditure than increasing taxes.
Among the measures the lobby want reviewed is the increase of Value Added Tax on petroleum products from the current eight percent to 16 percent saying this will further worsen the cost of living in the country.
They also objected the proposed increase to 35 percent Pay As You Earn for those earning a monthly income of Sh500,000 and above per month and instead want the tax band to be pushed to those earning over Sh1 million monthly
Kenya Human Rights Commission program manager Annet Nerima said that under the taxation proposals in the VAT category, the lobby rejected eight out of the 11.
Okoa Uchumi says the proposal to remove the VAT exemption on the supply of maize (corn) flour, cassava flour, wheat or meslin flour and maize flour containing cassava flour will raise the cost of living for many Kenyans.
“The coalition members however oppose a number of the proposals that are problematic and inconsiderable of the current economic situation,” said Nerima
Under the Excise Duty Proposed Amendments a total of eighteen (18) amendments were considered by members.
Out of these, the coalition endorsed thirteen (13) of them for ‘their consideration of the current cost of living in the county.
“Members oppose a total of five and recommend that the national assembly reject these.”
“The excise duty on Mobile money transfer services to be increased from 12% to 15% of the excisable value-members oppose this proposed amendment because it may lead to reduced transactions, thus reducing excise duty collection,” added Action Aid Kenya National Program Manager Lina Moraa.
In the Income Tax Proposed Amendments 13 out of 17 amendments were considered and endorsed by the Coalition.
They now want the legislators to reject the introduction of 10 percent PAYE tax on the first Sh24,000 without relief, recommends retaining but with 100 percent relief as it is currently with the justification that the relief will cushion low-income earners from the high cost of living.
Their objection to some of the proposals come at a time that the government is hard pressed to increase its revenues.
It is estimated that for every Sh100 the government collects as revenue, more than Sh65 goes to service the national debt.
This has further been worsened by the fact that for the first three quarters the Kenya Revenue Authority (KRA) in the revenue collection for the 2022/2023 Financial Year have been below target.
Out of the targeted Sh2.07 trillion for the current fiscal year, Sh1.57 trillion has been collected. Almost 25 percent below the target amount.
The CSO argue that The high debt burden, the unmet revenue collection and a large budget deficit require fiscal consolidation and revenue mobilisation.
