Stakeholders Continue Presenting Their Views On The Finance Bill 2023

Mt Kenya Times

News
29 May 2023

Mt Kenya Times

By: John Kariuki

Worth Noting:

SKM Africa also presented their proposals on the reclassification of fertilizer from zero-rated supplies to exempt supplies. The team argued that exempting fertilizer means that the dealers cannot claim any VAT input incurred in the supply. This goes against the current efforts by the government to subsidize fertilizer in an effort to lower the cost of basic commodities.
𝐻𝑎𝑘𝑖 𝑌𝑒𝑡𝑢, a human rights organization based in Mombasa lauded the proposal to exempt LPG gas from VAT and Import Declaration Fee (IDF). They supported that this will go a long way in not just lowering the cost of living but also saving our forests from further exploitation.

The Departmental Committee on Finance and National Planning has continued receiving proposals on the Finance Bill 2023. In a session chaired by Kuria Kimani (Molo), different stakeholders continued submitting their proposals, majoring on different taxations and the National Housing Fund.

The Old Mutual Group was the first to present its submissions on taxation of insurance compensation for the loss of taxable supplies, whereby the stakeholders proposed a deletion of that. This is because compensation for loss is not a gain or supply but a reinstatement of the position before the loss occurred. The stakeholders claim that this will discourage Kenyans from taking up insurance policies and therefore frustrate financial inclusivity efforts.

MAK Partners & Advocates submitted on the requirement to deposit 20 percent of disputed taxes with the Commissioner or security, equivalent to 20 percent of the disputed tax before filing an appeal to the High Court, whereby they argued that it may result to an infringement of the taxpayers right as it puts a premium to the cost of accessing justice.

Viongozi wa Kiambu, led by former Kiambu Township MP Jude Njomo proposed on amongst other issues, a review of the intended increase in excise duty rates on mobile money transfer. They argued that increasing rates from 12 percent to 15 percent will most likely increase mobile money charges by telecommunication operators, which will be pushed to the consumers of the service.

SKM Africa also presented their proposals on the reclassification of fertilizer from zero-rated supplies to exempt supplies. The team argued that exempting fertilizer means that the dealers cannot claim any VAT input incurred in the supply. This goes against the current efforts by the government to subsidize fertilizer in an effort to lower the cost of basic commodities.

𝐻𝑎𝑘𝑖 𝑌𝑒𝑡𝑢, a human rights organization based in Mombasa lauded the proposal to exempt LPG gas from VAT and Import Declaration Fee (IDF). They supported that this will go a long way in not just lowering the cost of living but also saving our forests from further exploitation.

However, the organization rejected the proposals on the increase of VAT on petroleum products from 8 percent to 16 percent, increase of tax on mobile money transfer and digital lending fees, increase in turnover tax rate to 3 percent and lowering of the tax band to Kshs. 500,000 per year, introduction of a Kshs. 5 excise duty on sugar, the mandatory 3 percent housing fund and the introduction of 15 percent withholding tax on digital content monetization.

Mr. Henry Kabogo of the Water Bottlers Association of Kenya raised concerns on the Excise Tax on water, a basic human need. He noted that Section 10 of the Excise Duty Act, which subjects basic goods like water to excise tax, should be repealed. He instead proposed bottled water to be dropped from the First Schedule of the Excise Duty Act 2015, and instead the Sin Tax to be pushed to the plastic bottles as they are detrimental to the environment.

Munene Micheni & Company Advocates proposed different reviews on taxation, and presented a new proposal under the Retirement Benefits Act (RBA), whereby they called on an extension of the term of office of trustees to five years, renewable once. They also proposed an amendment of the Act to allow members of a pension scheme to access loans from their savings; of up to 40 percent to fund purchase of a residential house, up to 20 percent to fund critical medical cases and up to 10 percent to fund education.

The Lawyers Hub, highlighted different proposals for consideration, including introduction of tax incentives such as reduced tax rates or exemptions for small businesses and start-ups which will stimulate economic growth and create jobs. The group also proposed an introduction of investment incentives such as tax breaks or credits for investments in priority sectors including healthcare, technology, and renewable energy.

The African Women Studies Centre from the University of Nairobi, presented their memoranda on the introduction of excise tax on human hair and other products like wigs, false beards, eyebrows and eyelashes. The team proposes that levying an excise on these kinds of goods which have no negative externalities should be reviewed.

The public hearings continues.