The Finance Bill 2024 in Kenya has sparked widespread protests and opposition from various quarters. The bill, which aims to raise revenue for the government, has been criticized for its punitive tax measures and potential negative impact on the economy.
In this blog post, we will delve into the main reasons behind the opposition to the Finance Bill 2024 and explore the implications of these protests on the country's economic landscape.
Increased Tax Burden on Citizens
One of the primary concerns is the increased tax burden on citizens. The bill proposes a range of taxes, including a 16% value-added tax (VAT) on bread, a tax on diapers, sanitary towels, and insurance, which are seen as essential items that should not be taxed.
This has led to widespread discontent among Kenyans, who feel that the government is placing too much of a burden on them.
Regressive Taxation
Another major issue is the regressive nature of the tax proposals. The bill disproportionately affects low-income earners and small businesses, which are already struggling to make ends meet. This has led to accusations that the government is targeting the most vulnerable segments of society.
Economic Burden on SMEs and Consumers
The bill's tax measures are also seen as a significant burden on small and medium-sized enterprises (SMEs) and consumers. Higher compliance costs and tax rates will negatively impact these businesses, hindering economic growth and development.
Lack of Transparency and Consultation
Critics argue that the government did not engage in adequate consultation with stakeholders before introducing the bill. This lack of transparency has led to widespread mistrust and opposition to the bill.
Prioritizing Taxation Over Industrialization
Some experts argue that the government should prioritize industrialization over taxation to expand the tax base and promote sustainable economic growth. The current approach, they say, is short-sighted and will only lead to further economic stagnation.
Potential Negative Impact on Economic Growth
The bill's tax measures are also seen as a potential threat to economic growth. Higher taxes can lead to reduced consumer spending and investment, which can hurt the economy.
The opposition to the Finance Bill 2024 in Kenya is rooted in concerns about the increased tax burden on citizens, regressive taxation, the economic burden on SMEs and consumers, a lack of transparency and consultation, prioritizing taxation over industrialization, and the potential negative impact on economic growth.
These concerns have led to widespread protests and opposition from various quarters, highlighting the need for the government to revisit its approach to taxation and economic policy.
