Groups warn tax threatens donor support

The civil society and churches have warned that taxing charities will push some donors to withdraw support.

These groups on Monday said some of their supporters have showed signs of pulling out following the move by the Treasury to tax the non-governmental organisations.

Finance minister Njeru Githae said in the Budget read last week that in the 2012/2013 financial year, churches, trusts and charities will be taxed to improve administration of tax exemptions.

“Some contributors have begun complaining that it is unfair to tax funds that they are issuing tax-free for socio-economic development,” said Mombasa Anglican church Bishop Julius Kalu.

Although the bishop did not mention the names of the contributors, he said a number of them are in water projects, children’s homes and support the disabled.

Kenya Community Support Centre (KECOSCE) executive director Phyllis Muema said the donors “will begin thinking that they are donating the money for support of government activities rather than the community.”

Mrs Muema also faulted the plan to tax the rental incomes, saying that it will deny Kenyans the right to decent housing.

“As a person who interacts with suffering communities, people who even do not have decent housing will be forced to sleep in the streets,” she said.

She noted that the Budget should have focused more on ways of improving food security and other basic needs rather than burdening citizens who are struggling to make ends meet.

She also said stamp duty should be waived to enable residents to register their land.

“The four per cent duty that government is telling people to pay to have their lands registered is too much for the common man and should be reduced,” she added.

rokwany@ke.nationmedia.com