Why Finance Bill 2023 is likely to sail through, impose higher taxes

Parliament Buildings, Nairobi, September 29, 2022. [Elvis Ogina, Standard]Caption

The Finance Bill 2023 that proposes to expand taxation is likely to be approved by Parliament given that Kenya Kwanza Alliance enjoys majority numbers in the House.

The Bill that seeks to increase VAT on fuel, which will have a ripple effect on the cost of electricity and other commodities, has already been met with criticism from civil society and workers' unions even as it went up for public participation.  

But in a bid to finance the implementation of the Kenya Kwanza manifesto, President William Ruto is counting on his numerical strength in the August House to push through the controversial Bill with his foot soldiers already vowing to impose the government agenda.

This resolve has now set the stage for a clash between Kenya Kwanza and Azimio la Umoja One Kenya lawmakers who have been whipped by opposition leader Raila Odinga to reject the Bill.

A look at the composition of Parliament however indicates President Ruto has the upper hand where his Kenya Kwanza Alliance enjoys the support of 179 of the total 349 members, against Azimio’s 157 MPs.

A recent expression of intent by approximately 20 MPs from the Jubilee Party to work with Kenya Kwanza could further shore up Ruto's numbers to 200. 

According to a ruling delivered by Speaker Moses Wetang'ula last year, Azimio previously had a majority with 171 members against Kenya Kwanza’s 165 but thanks to post-election agreements entered into after the 2022 General Election, Kenya Kwanza gained majority status.

This means should the Finance Bill 2023 be tabled for debate, Kenya Kwanza will marshal numbers to ensure it sails through - a situation Nandi Senator Samson Cherargei avers is inevitable.

To pass, the Bill requires a simple majority. This, of course, is assuming that Kenya Kwanza convinces Kenyans that more taxes means a lower cost of living.

“We are going to pass the Finance Bill in Parliament without an amendment. As a country we do not have that luxury and instead have two options, we either borrow more or we tax. Our creditworthiness internationally is already meaning we have no option but to impose taxes,” said Cherargei.

The Senator argued that to finance the country’s Sh3.6 billion budget and plug a Sh800 billion deficit, taxation was the way to go. 

“I have seen the former Prime Minister say Kenyans should not be taxed but he should know that is the only option government has for now. The taxation that has been imposed is more on luxury goods, beauty products, and alcohol products and I don’t see why there is hue and cry over that,” he said.

National Assembly Deputy Minority leader Robert Mbui was however adamant that the Bill was “over-ambitious” and Azimio members are ready to stop the Kenya Kwanza government in their tracks.

“There is a high chance that this Bill will have almost every other clause amended because it is overtaxing the electorate. This parliamentary Bill is really draconian and it is the type that any right-thinking legislator will oppose,” said Mbui.  

He also faulted the assumption that MPs elected under the Kenya Kwanza Alliance and those who defected from Azimio to join the government side, would automatically vote in favour of the Finance Bill.

“As Azimio we are counting on the conscience of MPs regardless of their political affiliation. I have had conversations with leaders from Kenya Kwanza and I can tell you they are not comfortable with the Bill and will vote against imposing more taxes on their constituents,” said Mbui.

Political analyst Ishmael Nyaribo is however optimistic that Kenyans will exercise their right to public participation and give their views on the Bill.

“Kenyans should go to the town hall meetings and send their memoranda to Parliament and express their views on the Bill. That way, Parliament will not impose any law on us…Kenya Kwanza also has the majority but I don’t think they will suffocate Kenyans by giving us bad laws,” said.