By Lucy
The Finance Bill 2024 has stirred significant controversy in Kenya, as many citizens feel it disproportionately burdens them with taxes while offering minimal relief. Critics argue that the bill exemplifies a glaring disconnect between the government’s fiscal policies and the socioeconomic realities of ordinary Kenyans. Among the contentious provisions is the 16% VAT imposition on a broad array of goods and services previously exempt. This includes food items like gluten bread and unleavened bread, essential for many low-income families, now subject to the standard VAT rate, increasing the cost of living.
The bill also targets financial services, proposing to shift previously exempt services, such as issuing credit cards, foreign exchange transactions, and check handling, to the standard rate. This move will make banking and financial services more expensive, disproportionately affecting the economically vulnerable who rely on these services for daily transactions.
Furthermore, the bill’s exemptions favour large-scale investors and industries, raising concerns about equity and fairness. For instance, capital goods for manufacturing with investments over KES 2 billion are exempt, as are supplies for constructing specialized hospitals and tourism facilities, highlighting a bias towards wealthy investors and established enterprises.
Local filmmakers, educational institutions needing musical instruments, and small-scale recyclers of plastics face fewer incentives, contrary to what many deem necessary for promoting grassroots economic development and environmental sustainability. The Finance Bill 2024, critics argue, thus exacerbates inequality, placing a heavier tax burden on ordinary citizens while affording significant exemptions to the wealthy and well-connected. As public dissent grows, the need for a more balanced, inclusive fiscal policy becomes increasingly apparent.
