Seek public views on SIM card, beer tax proposals

Parliament is once again considering last-minute changes to the Finance Bill in the midst of increasing political interference that could derail the funding of the budget of the new government.

Without subjecting proposals to public participation, Kikuyu MP Kimani Ichung’wah last week proposed higher taxation on beer and a new duty on imported SIM cards.

The legislator is seeking to increase excise duty on beer, wine and spirits by between 20.2 percent and 25.6 percent, opposing the recommendation by the National Assembly Finance Committee, which reversed the Treasury’s proposals to raise alcohol taxes.

In a raft of amendments largely seen to have the blessings of the Deputy President William Ruto-led Kenya Kwanza coalition, Mr Ichung’wah also proposed a new Sh50 excise duty on every imported ready-to-use SIM card.

The proposals, if adopted, will see the tax on a litre of beer rise 23.1 percent to Sh150 from the current Sh121, which will increase the price of a bottle of beer by Sh15. This means that mobile phone users seeking to replace or register afresh will pay more for the product, with the mobile telephony market a key target for raising billions of shillings in taxes.

The amendments by Mr Ichung’wah contradict the recommendation by the Finance and Planning Committee, chaired by Gladys Wanga (Homa Bay), that the current taxes on alcohol be retained in the financial year starting July.

The higher duties proposed by Mr Ichung’wah come weeks after the MP said the Kenya Kwanza Alliance would shoot down the Finance Bill, 2022, arguing that additional taxes will burden households.

And in a further blow to the Treasury’s plan to generate additional Sh50.4 billion revenue in new taxation measures for the government which will take power after August polls, the Finance committee had also wanted increased taxation on betting, gaming, prize competition and lottery dropped.

Though legislators are within their legal mandate to make changes to laws, it is important that they ensure that there is sufficient public participation in line with the Constitution. Lack of public participation may see the new changes thrown out by a court of law.