Civil society raises concern on tax burden, reject referendum push

The dominant theme among various stakeholders was the urgent need to address the soaring cost of living, with many emphatically rejecting the idea of a referendum.

During the sessions at Bomas, stakeholders drawn from the Law Society of Kenya, the Center for Multiparty Democracy (CMD), the Election Observation Group (Elog), the Kenya National Chamber of Commerce and Industry (KNCCI), and Mkenya Daima, made compelling presentations before the ongoing dialogue committee.

LSK through its President Eric Theuri suggested the introduction of staggered elections for various seats. Theuri argued that holding elections for different positions at separate times, including the presidential election, would allow losers in one race to contest other seats, thereby promoting greater political engagement and participation.

"Is it time to amend the Constitution so that the elections are not held at the same time? Would there be considerable merit in separating the terms on when elections can be done? It makes it extremely difficult to conduct six elections at the same time," he said.

Last week, IEBC, while appearing before the committee also suggested the introduction of a staggered election system.

Theuri said that Parliament should conduct a thorough review of the Finance Act 2023 regardless of the outcomes of any pending court decisions expected in November.

"Is the object of taxation only about getting revenue to sustain government activities? I think that is the question that Kenyans are asking. There are taxes after taxes. Is that burden being shared fairly," posed the LSK president.

Theuri queried whether there were any tax incentives in place to alleviate the burden faced by individuals impacted by existing taxation measures.

"I believe we have enough time to be able to settle the law before we get to the next election and have a system that is predictable and meets the constitutional threshold," he said.

On IEBC, Theuri emphasized the importance of having a professional and non-partisan commission.

He highlighted the need to ensure that the appointment of commissioners is not influenced by political actors and a more professional IEBC to enhance the competence of the electoral process.

The LSK President further advocated for transparency in electoral audit, emphasizing that the outcome should be accessible to the public, irrespective of whether election disputes arise.

This transparency, he contended, would be instrumental in fostering trust and confidence in Kenya's electoral system.

CMD proposed an amendment to Article 132 of the Constitution, which mandates the president to report on the realization of National Values and International Obligations during the State of the Nation Address.

CMD's proposal calls for the inclusion of Article 43, which focuses on economic and social rights, into this annual address. By doing so, the CMD aims to elevate the responsibility of ensuring Kenyans' rights to live in dignity and access social security, housing, food, water, healthcare, education, fair wages, and an adequate standard of living.

The organization raised concerns about the country's narrow tax base and the burden it places on a limited number of taxpayers.

"We are asking for the widening of the tax base making sure that as many Kenyans are paying for the burden that we all have collectively. We seek clarity and consistency on taxation matters and seek incentives for compliance and a streamlined tax administration," said Priscilla Nyokabi presenting on behalf of the organisation.

However, Nyokabi argued that the realization of the proposals did not necessitate a referendum.

"We do not support a referendum. We support amendments that continue the work of implementation of the 2010 Constitution. Amendments that strengthen our political parties and our democratic culture," she said.

"I don't think we are in any place now to go into a referendum. We have tried that referendum experiment every middle of an election term and it is costing us and our economy," she added.

Supporting Nyokabi, Mucai Kunyiha from Mkenya Daima, a multi-stakeholder organization challenged the entrenching of the positions of office of the leader of the opposition and that of Prime Cabinet Secretary in the Constitution. Kunyiha asserted that a referendum would be ill-advised given the present challenging economic climate.

"We know referendums are generally and will always be divisive one way or another. We have serious economic issues. So, if we want to address the cost of living, that should be our top priority," he said.

Kunyiha underscored the impact of corruption and wasteful spending at national and county government levels on the rising cost of living. He noted that increasing bureaucracy and taxation were identified as detrimental to market competitiveness, leading to a decline in exports and an unfavourable trade balance.

"It is our considered view that we will only address the cost-of-living crisis by dealing with these fundamental issues," he said.

As a result, he firmly opposed any proposal for the creation of new funds in the Constitution or through legislation arguing that MPs should focus on their legislative and oversight role.

"Handling funds subverts the principle of accountability, checks and balances," said Kunyiha.

While presenting their submission Elog through its national coordinator Mule Musau underscored the necessity of evaluating the entire electoral process extending beyond the presidential election.

Mule emphasized the importance of assessing not only the presidential vote but also the voter education, registration, and various other electoral procedures, including political party nominations. This comprehensive evaluation is seen as a crucial step towards enhancing the transparency, fairness, and effectiveness of Kenya's electoral system, a stance the Elog has maintained since the pivotal 2017 elections.

"Limiting ourselves to the presidential election will not address the issues in the electoral system," said Mule adding that, "on the fidelity of political parties, we propose a legal regime to govern political party nomination such as the political parties Bill 2020."

The committee will remain open to receiving memoranda from various stakeholders throughout the week.