Blow to Ruto as Finance Bill Hearing Raises New Alarm

by Washington Mito on Saturday, 27 May 2023 – 7:45 am

President William Ruto addressing residents of Embu County on May 27, 2023.

President William Ruto's administration faces an uphill task after 55 out of 66 groups opposed the proposed Finance Bill 2023 during hearings held by the National Assembly Finance Committee on Friday, May 27.

According to a statement released by the National Assembly, several lobby groups and workers' representatives expressed reservations over the proposed Housing Fund and increased taxation on various products.

In particular, the Kenya Airline Pilots Association proposed the Housing Fund be voluntary because a section of working Kenyans had already invested heavily in housing.

The team also suggested that there was limited information about the project to the public, making it very difficult for them to support the proposals being advocated for by Ruto. They thus urged the government to conduct public awareness.

National Assembly Finance Committee members hosting delegated for the Finance Bill hearings on May 27, 2023.

Another issue raised regarding the Housing Fund was that the contributors did not have an option of choosing the design and model of houses built by the government.

"The association proposed the housing levy be made voluntary to those wishing to own houses under a government programme and also for the government to suspend the housing plan until when there will be an increment in salaries and a reduction in the cost of living," read the statement in part.

On the other hand, the Petroleum Institute of East Africa proposed changes in the taxes on petroleum products to allow oil marketers to seek refunds for the products in the country.

The team noted that the move would make fuel cheaper and greatly benefit the public.

"Surveyors of Kenya also presented their proposals against the introduction of withholding tax on rental income collected by agents appointed by the Commissioner.

"The Institute noted that it will be impractical to remit tax in 24 hours given the logistics required and the jamming of the KRA portal at times," read the statement in part.

Other taxation plans also opposed during the hearings were a withholding tax rate of 15 per cent on digital content creation and the Digital Asset Tax (DAT) of 3 per cent.

Timelines

The Finance Committee commenced its hearings on May 21, with representatives of key bodies such as the Law Society of Kenya (LSK) presenting on the first day.

Treasury CS Njuguna Ndung'u chairs a bilateral cooperation meeting Czech republic and Kenya at the Treasury Building, Nairobi county on Wednesday, January 11, 2023.

According to the NA, the Bill should be approved by June 30 before enacting the Appropriation Law, 2023, stipulating how the government raises finances to fund the budget.

Treasury Cabinet Secretary, Njuguna Ndung'u is expected to read the Budget Statement on Thursday, June 8.

What it Means for Ruto

Following the opposition to some of the taxation proposals, MPs and the Treasury will be forced to review some of the taxation laws and seek alternatives to fund Ruto's first Budget.