Proposed Finance Bill threatens job security, warns bankers

Kenya Bankers Association Ag. Chief Executive Officer Raimond Molenje. [Standard]

Bankers have warned of loss of jobs in the country due to looming reduced investments should the proposed Finance Bill sail through which partly seeks to introduce Value Added Tax (VAT) on foreign exchange. 

The financial managers now say the bill that also seeks to introduce tax on foreign exchange may see a mass exodus of investors from the country, consequently hurting the employment sector. 

Kenya Bankers Association Ag. Chief Executive Officer Raimond Molenje expressed fear, noting that having the bill pass, will deny the country its foreign exchange earnings. 

"When you introduce VAT on foreign exchange, that's foreign currency. Now, when you put VAT on exchange of foreign currency, that brings a problem," he said last Thursday, during a networking forum in Nairobi. 

Describing the proposal as a limiting factor to the growth of the economy, he appealed to the National Treasury to rethink the decision, insisting that "we are not importers, we have to get dollars to be able to import."

"If this bill come to effect, it will add onto the trouble we have had with the value of Kenyan Shilling from last year up to February this year, where the Kenyan shilling was actually at 160 against the dollar," he said, adding that there is a need to maintain the stability of the currency.  

The contentious bill has since drawn mixed reactions across different sectors of the economy, and with the conclusion of public participation, most taxpayers are now urging lawmakers to shoot it down. 

"We are pleading on behalf of companies, we are pleading with the National Treasury to be able to step back, be able to just leave the transactions the way they are currently," he said. 

He also faulted the provision that seeks to scrap off specific exemptions on manufacturing, saying the tax proposal will make Kenya a "very expensive" destination for investors.

During the forum, Lilian Ngala Network that brought together various professionals including financial experts, youths were urged to embrace creativity and invest in social capital. 

The organisation's Director Lilian Ngala said networking provides opportunities for capacity building that is essential in career and professional development. 

"We are preparing our youth who are coming from colleges, universities to be able to get employment. Also, empower those who are already in employment to be able to enhance their skills so that they can actually be able to take up more responsibilities," she stated.