The Finance Bill, 2023 has aroused significant questions and emotions among Kenyans.
As provided under Chapter 12 of the Constitution, the underlying principles that underscore include but are not limited to openness, accountability, public participation, shared tax burden, and an equitable finance system.
Further, the state must ensure financial proposals make special provisions for the marginalised, reinforcing the quest to ensure citizens benefit from financial inclusion and economic empowerment.
Financial inclusion is commonly defined as the proportion of individuals and organised groups that use financial services. It refers to a state where all gender and working-age adults have adequate access to convenient and responsible services delivered at affordable and sustainable customer costs, including credit, savings, payments, and insurance from formal providers (GPFI, 2011).
Financial inclusion also ensures individuals, households, and businesses in a community have adequate access to standard financial services and products delivered sustainably.
The Finance Bill 2023 seeks to amend various laws relating to taxes and duties to increase government revenues. This includes income tax that increases gross sales from 1 per cent to 3 per cent; digital assets are proposed with a tax of 3 per cent levy on the transfer charges applied during an exchange of the assets.
Digital content creators, having not been left behind, are to be taxed 15 per cent of payments made to digital content creators. Amid the hue and cry of Kenyans and mostly those in employment, 3 per cent housing levy deductions are proposed from the monthly payments from their ever-shrinking pay slips.
Equally, on the proposed amendments, VAT on petroleum products is augmented to 16 per cent from current 8 per cent. There are increased excise duty rates, including mobile money, where taxpayers are to deposit 20 per cent of the tax in dispute at KRA.
Additionally, the Tax Procedures Act will no longer be operational after the Bill is passed and assented to by the President. The Miscellaneous Fees & Levies Act has been proposed to revise the import declaration fee from 3.5 per cent to 2.5 per cent. With the cost of living and economic standing presently, with these acutely raised taxes, will financial inclusion and economic empowerment be improved?
The proposed Finance Bill 2023 will not be a good stepping-stone for Kenya entering a Common Reporting Standard (CRS) regime if enacted.
The proposal lacks a clear framework for implementing financial inclusion and, by extension, economic empowerment.
To advance financial inclusion, as part of this commitment, the government should infuse inclusion in any proposed laws, policies, and regulations that align with the proposed Finance Bill 2023 that, includes the following;
-The writer is a lawyer