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NEWS & CURRENT AFFAIRS

The Nairobian

Captains of industry raise concerns over proposed tax hikes

Business

By Sofia Ali | May 31, 2024

Kenya Association of Manufacturers (KAM) Trade and Tax Committee Chairman Brahat Shah and CEO Anthony Mwangi present their views during the public participation on the Finance Bill, 2024 before the National Assembly Finance Committee at Hilton Gardens Hotel, Machakos on May 29, 2024 [Boniface Okendo, Standard]

Chief executives of various industries have voiced their concerns about Finance Bill 2024 that has sparked anger, particularly among consumers and businesses.

The Kenya Association of Manufacturers (KAM) called the tax proposals in the Finance Bill “unreasonable” and “overburdening” to the taxpayers. KAM Chief Executive Anthony Mwangi warned that excise taxes on upstream production would stifle the manufacturing sector, which is the engine of job creation and export revenue.

“If the production engines are not running at optimal speed, this country will not create jobs and revenue. Let us not throw away what has been built by sticking to this proposal,” he said.

“Over decades, because of short-term goals, these decisions have been made without a 360 view of the economy. The cost of doing business will go up by 20 to 30 per cent, and we will not be able to export.”

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Mwangi fears there will be more business closures and a shift to neighbouring countries for essential services if the proposals pass. Fredrick Kimotho, senior tax expert at Deloitte said the proposal granting the Kenya Revenue Authority (KRA) the power to collect taxes from those indebted to a taxpayer would be “injurious” to businesses and economic growth, recommending its deletion.

Institute of Certified Public Accountants Chairman Philip Kakai called for equitable tax policies.

“Over-reliance on salaried employees and a limited pool of taxpayers underscore the importance of expanding the tax base to encompass diverse sectors, including the informal economy, to foster economic inclusivity and sustainability,” he said.