The Constitution ushered in a new dispensation that requires public participation at all levels of governance.
The Finance Bill 2023 was perhaps the most debated proposed law in Kenya’s history owing to the significant taxation changes needed to achieve the ambitious budget of Sh3.6 trillion for the 2023–24 fiscal year.
The Bill introduced the Housing Levy, revised pay-as-you-earn tax rates with 32.5 percent as the standard and 35 percent for income above Sh6 million, and increased value-added tax (VAT) on petroleum products from eight percent to 16 percent.
As the government seeks to raise Sh3.914 trillion in the new financial year, the Finance Bill 2024 is poised to introduce a slew of taxes that call for vigorous debate and public participation. This is because tax laws directly impact people’s finances. Public involvement helps ensure the tax burden is distributed fairly across different income groups and sectors of society.
Raising concerns over new taxes or amended laws in the Bill can help mitigate additional tax burdens.
Secondly, public participation fosters a sense of ownership and increases acceptance of the tax system. As such, all sectors of society must make their views known on the tax proposals that matter to them to ensure the proposals, once enacted, are implemented without too much contestation.
Thirdly, taxation is a social contract. Public participation strengthens democratic principles by giving citizens a voice in how their contributions are used to fund public services. This underscores the importance of public participation as the best means of ensuring that concerns raised by the citizenry are addressed effectively before the enactment of tax laws.
Finally, participating in the making of the Finance Bill can expose potential loopholes or unintended consequences in proposed tax laws.
Tax laws with too many loopholes or deductions can become very complex. This can burden taxpayers and the government, as complying with and enforcing the law becomes more expensive and time-consuming.
We must voice our concerns about the Bill’s key pain points and supportive measures in determining whether it will be passed in a form that benefits us or worsens our situation. We need to hold our elected leaders accountable, ensuring they represent our concerns and advocate for what the people of Kenya want and need in this critical legislative process.
The writer comments on public policy and taxation.
