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The 2024 Finance Bill to be tabled in Parliament today has generated a huge public outcry against the punitive taxation proposals it contains.

While taxation is the most practical way of raising revenue to finance government spending on goods and public services, setting an efficient and fair tax system is a major challenge. That is the harsh reality facing MPs confronted by fierce public opposition to taxation measures.

Through public participation guaranteed in Article 10 (2) of the Constitution as one of the national values and principles of governance, Kenyans have expressed their right to have their opinion heard on this matter of national importance. This constitutionally guaranteed right commits the National Assembly to facilitate public participation and involvement in its legislative and other business.

The Finance and National Planning Committee has heard testimonies from the public, business community, non-state actors and other stakeholders united against the bill.

Kenyans are vehemently opposed to proposed new taxes on bread, cooking oil, financial services, motor vehicles and a new levy on environmentally unfriendly products. However, unlike its precursor, the new contentious tax measures have brewed massive popular discontent and raised a political storm.

Parliament and its committees are dominated by the ruling Kenya Kwanza political formation, whose members have been engaged in a protracted battle with the opposition Azimio la Umoja coalition since the bitterly contested 2022 election.

Azimio MPs, buoyed by huge public sentiment against the bill, have vowed to shoot it down amid internal wrangles currently rocking the ruling coalition.

Last year, President William Ruto personally championed the bill, whipping up Kenya Kwanza MPs to steamroll it through the House despite spirited though rather lukewarm Azimio opposition after its rejection in the public participation stage.

Faced with the wrath of the public and conflict within its ranks, the President’s allies and the government majority on the finance committee appear to have succumbed to great pressure from wananchi, religious groups and other stakeholders in the economy.

They claim to have listened to the people and will do what is right and amend clauses in the bill likely to hurt Kenyans.

Campaigns have intensified with a viral phone campaign targeting MPs on how they will vote for the bill and threatening repercussions, including invoking the recall clause in articles 97 and 97 of the Constitution.

An ideal tax system should raise revenue without excessive government borrowing, which does not seem to be the case with the current government despite many public pronouncements since it came into office.

Revenue should be raised without discouraging or stifling economic activity or contributing to high levels of unemployment, poverty and human rights violations. And without deviating from the tax systems in other countries. Finance experts have also called for the rejection of the bill, stating that the issue facing MPs is not a lack of government revenue but rather inefficient allocation and use of existing funds.

Data indicates that Kenyans pay taxes equivalent to the combined revenues of Rwanda, Tanzania and Uganda. Yet, its population is significantly smaller than the combined inhabitants of the three East African Community countries.

Questions have been raised about how the government manages public finances. Despite Kenya’s $31 billion expenditure budget, the country is still grappling with the highest poverty rate, unemployment rate, cost of living and cost of doing business in the region.

— The writer comments on economic affairs