By Treezer Michelle Atieno
The current taxation system in Kenya has been a subject of intense debate and criticism. The proposed house levy, introduced as part of the government’s efforts to fund affordable housing, faced significant opposition from various quarters. On 19th January 2024, the Court of Appeal lifted an order blocking the implementation of the Social Health Insurance Fund (SHIF), paving the way for the government to roll out the new Universal Health Care (UHC) laws.
The court ruling now allows the government to start the implementation of the Social Health Insurance Act of 2023, the Primary Health Care Act of 2023 and the Digital Health Act of 2023. The three laws replaced the National Health Insurance Fund (NHIF).
Francis Atwoli, the Secretary-General of the Central Organization of Trade Unions (COTU), has criticized the government’s approach to taxation, stating that it is burdening Kenyans with excessive levies.
The government has been experiencing pressure to increase its revenue collection to fund its ambitious development agenda. However, the current tax regime has been widely criticized for being burdensome to ordinary citizens and businesses.
The high tax rates and complex tax laws have created a challenging environment for economic growth and investment. According to recent remarks by Atwoli, the heavy tax burden is taking a toll on Kenyans, especially the low and middle-income earners.
Critics argue that imposing an additional levy on already overburdened citizens is unjustifiable, considering the economic challenges Kenyans have to face. The introduction of such levies without adequate consultation and consideration of their impact on citizens’ livelihoods has raised concerns about the government’s approach to revenue generation.
Moreover, Kenya’s state of borrowing has raised questions about the sustainability of its fiscal policies. The country’s increasing reliance on borrowing to finance its budgetary needs has raised concerns about its long-term financial stability. High levels of public debt can have far-reaching implications for the economy and citizens’ welfare, as debt servicing obligations may divert resources away from critical social services and infrastructure development.
The government must consider the socio-economic implications of its revenue generation measures and ensure they do not burden citizens or hinder their access to essential services.
