LSK wary as National Assembly seeks nod on 2022-23 Budget

The National Assembly is scheduled to commence hearings on the Finance Bill, 2022 proposing to increase the prices of basic commodities amid protest from a section of stakeholders.

Parliament is seeking a public nod on the Bill which seeks to raise more funds to seal an Sh860 billion fiscal deficit, and bridge the gap in its Sh3.3 trillion budget.

Treasury proposed to increase excise duty on certain products by 10 per cent as part of the proposed new tax measures meant to help the government tap an additional Sh50.4 billion, in the 2022-2023 fiscal year.

The schedule of the hearings says legislators who sit in the Finance Committee are expected to meet close to 60 stakeholders between today and Thursday to pave way for a report expected to be tabled in the National Assembly next week to guide debate on the bill.

The meeting comes even as the Law Society of Kenya (LSK) warned it is not the time to tax Kenyans more and thus asked the committee to delete the proposals that will affect Kenyans.

Taxation laws

In a memorandum, which is submitted to the committee for consideration, LSK president Eric Theuri raised concerns over the bill which it claims exemplifies an appetite for tax revenue and introduces taxation laws that literally squeeze out the life of the most struggling businesses.

Theuri said they have raised concerns with over 22 proposed amendments contained in the bill which they said are problematic and which if enacted will make the country highly unattractive as a business destination, as it will increase the level of unemployment and encourage the use of substandard or illegal products.

“ The Finance bill 2022 inter alia exemplifies an appetite for tax revenues that will kill businesses, livelihoods and general welfare of ordinary Kenyans. The bill displays the increasingly pervasive tendency by the executive arm of government to introduce taxation measures that end up creating an environment that is not conducive for Kenyans and is in effect against its role of supporting the society, the economy and providing public service,” said Theuri.

Added Theuri: “The right thing, in this case, is to amend the bill as appropriate and delete the proposals that will negatively affect the lives of the people they have been elected to represent.”

Among the sections, that have raised concerns is the proposal to remove maize flour from the list of zero-rates commodities as it would be charged Aalue Added Tax (VAT) of 16 per cent, increasing the cost of clothes and equipment used for safety and protection by hospitals and clinics as well as introducing an unreasonable degree of unpredictability with respect to the level of tax rates which they said is against the principles of fiscal responsibility contained in the Public Finance Management Act.

Others include the proposal requiring any person challenging a tax assessment to deposit 50 per cent of the disputed amount before filing a case in court which they said is unconstitutional, retrogressive and intensified to impede access to justice as well as the move to make locally manufactured finished goods for export more expensive and uncompetitive.