President William Ruto's administration has encountered a significant challenge as 55 out of 66 groups expressed opposition to the proposed Finance Bill 2023 during hearings conducted by the National Assembly Finance Committee on Friday, May 27.
According to a statement released by the National Assembly, various lobby groups and workers' representatives voiced reservations regarding the proposed Housing Fund and increased taxation on different products.
In particular, the Kenya Airline Pilots Association suggested that the Housing Fund should be voluntary, as a section of working Kenyans had already heavily invested in housing. The association also highlighted the limited information available to the public about the project, making it difficult for them to support the proposed measures advocated by Ruto. They called for the government to conduct public awareness campaigns.
Another concern raised regarding the Housing Fund was that contributors did not have the option to choose the design and model of houses built by the government.
"The association proposed that the housing levy be made voluntary for those interested in owning houses under a government program. They also suggested that the government suspend the housing plan until there is an increase in salaries and a reduction in the cost of living," stated the release.
On the other hand, the Petroleum Institute of East Africa proposed changes in the taxes on petroleum products, allowing oil marketers to seek refunds for products within the country. The institute argued that this would lower fuel prices and greatly benefit the public.
"The Surveyors of Kenya also presented their proposals opposing the introduction of withholding tax on rental income collected by agents appointed by the Commissioner. The Institute argued that remitting tax within 24 hours would be impractical given the logistical requirements and the occasional congestion of the KRA portal," the statement added.
Other taxation plans that faced opposition during the hearings included a 15% withholding tax rate on digital content creation and the Digital Asset Tax (DAT) of 3%.
Timelines
The Finance Committee initiated its hearings on May 21, with representatives from key organizations such as the Law Society of Kenya (LSK) presenting on the first day.
According to the National Assembly, the Bill is expected to be approved by June 30 to enact the Appropriation Law, 2023, which outlines how the government raises funds to finance the budget.
Treasury Cabinet Secretary Njuguna Ndung'u is scheduled to present the Budget Statement on Thursday, June 8.
Implications for Ruto
Given the opposition to some of the proposed taxation measures, MPs and the Treasury will be compelled to review certain tax laws and explore alternative methods to finance Ruto's inaugural Budget.
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Category: News · Related Topic: William Ruto
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