More and More, MPs need to Engage with Citizens for Representative Leadership to be a Reality

Kenya is currently abuzz with the Finance Bill 2024 (National Assembly Bill No. 30 of 2024) that formulates proposals relating to revenue-raising measures including the collection of taxes in Kenya. The Bill was read a first time in the National Assembly on 13^th May 2024. Soon after, the National Assembly advertised a call for public participation on the local dailies on 15^th May 2024 with a deadline of 28^th May 2024 set for submission of written memoranda. 

This gives Kenyans 13 days to familiarize themselves with the 136-page document, identify proposals that affect them or the sector they work in and submit their views for consideration by the Finance and National Planning Committee of the National Assembly. 

The Bill seeks to amend the Income Tax Act (Cap 470), the Value Added Tax Act (Cap 476), the Excise Duty Act (Cap 472), the Tax Procedures Act (Cap 469B) and the Miscellaneous Fees and Levies Act (Cap 469C). It further seeks to amend other pieces of legislation relating to fees, levies and management of public funds. These include the Affordable Housing Act (No. 4 of 2024), the Industrial Training Act (Cap 237), the Data Protection Act (Cap 411C), the Public Finance Management Act (Cap 412) and the Kenya Revenue Authority Act (Cap 469). 

What do these amendments entail? 

Taxation of Motor Vehicles at 2.5% on insured value subject to a minimum of Kshs. 5,000 and maximum of Kshs. 100,000. Introduction of a Minimum Top Up Tax. Repeal of Digital Service Tax (DST and introducing significance economic presence tax  (SEPT) at effective rate of 6%. Per diem policy revised on approved employer policy up to a maximum of 5% per day of employee’s gross monthly salary. Non –Taxable employee benefits threshold increase from Kshs 48,000 per  year from Kshs 36,000 and meal allowance limit  increased to Kshs 60,000 per year from Kshs 48,000. Pension contribution limit increased to Kshs 30,000 per month (Kshs 360,000 per year) from Kshs 20,000 (Ksh 240,000 per year). Contribution to Affordable Housing Levy and SHIF to be an allowable deduction and not relief. Advance Pricing Agreements (APA) introduction. Removal of exemption from income tax on income earned by a registered family trust and CGT on transfer of property to a registered family trust. VAT registration threshold increased to Kshs 8million from Kshs 5 million. Time of supply of export of goods is when the exporter is in possession of all required export confirmation documents. Transfer of a business as a going concern made an exempt from VAT. Supply of ordinary bread now proposed be exempt from current zero rate. VAT Proposal on financial services such as foreign exchange. Proposal for extension of time for the Commissioner to give an objection decision from 60 day to 90 days. Introduction of Eco-Levy to ensure manufacturers and importers pay for negative environmental impact of goods. IDF to increase from 2.0% to 3% of custom value. 

These details could be missed by a layman’s eye owing to the volume and jargon contained in the Bill, which has led to extensive civic education by sectoral leads and members of the civil society through community forums, traditional media engagements and online discussions. While the uptake and interest in these conversations has been great among citizens from all strata, there is a category of individuals that has an even bigger task where this Bill is concerned. A Member of Parliament (MP)

Beyond the call for public participation advertised by Parliament, MPs have a duty to not only objectively sensitize their constituents on the provisions of the Finance Bill 2024 but to provide an opportunity to receive their feedback and articulate the same on the floor of the House when the National Assembly resumes sittings on 4^th June 2024. 

The assumption is that they would have taken this period of recess to do exactly but the work doesn’t end there. When the debate of the Finance Bill during second reading commences, Kenyans would expect to see MPs present their issues while either supporting or opposing the various provisions. Kenyans would equally be keen on the vote taken at this stage and ultimately the Committee of the Whole House stage when the House shall be considering each clause and the amendments proposed. 

Last year’s consideration of the Finance Bill 2023 saw a largely disappointed populace that felt that Executive’s agenda preceded their interests. There have even been allegations of MPs admitting to not have fully understood the full spectrum of the Bill (now Act) implications and more so being guided by the political party position during the debate and vote. The Finance and National Planning despite having received numerous submissions rejecting in totality the Affordable Housing levy, still proceeded to repackage it and recommend the larger House to adopt it. 

This reflects poorly on the MPs’ representative role. A pattern that seems to be synonymous with the 13^thParliament. Members of Parliament ought to remember that the power they exercise is delegated to them by Kenyans who according to Article 1 of the Constitution, all sovereign power belongs to. Therefore, legislative decisions and contributions ought to be informed by citizens’ priority issues. Ideally, they should also be informing political party decisions and approaches to issues rather than imposing what the Executive deems to be a priority. 

While sectoral leads and civil society have done the work to sensitize Kenyans and point out to punitive proposals in the Bill, the buck still stops with Parliament where decision-making ultimately lies. 

Kenyans are currently pressed economically owing to the increased taxes and feeling short-changed with the state of service delivery. So here is a call to Members of Parliament, to remember who their loyalty first lies to before all else. Hopefully, there will be a shift in the narrative when the National Assembly resumes consideration of this Bill.

Posted by Loise Mwakamba on May 24, 2024

Categories:  parliament   Finance Bill   Finance Bill 2024   Kenya   Representative Leadership