Catholic Bishops in Kenya Ask Government to Pay Heed to Cries Over Contested Finance Bill

In the Finance Bill, taxes are proposed on basic commodities, motor vehicles, financial transactions, and eco levy on goods.

According to the Bishops, the Bill affects basic commodities such as bread, negatively impacting the poorest in the community.

On motor vehicles, the Bill introduces a 2.5 percent tax on existing taxes which the Bishops say will burden the common person by increasing public transport fares.

They say, “Although this tax could potentially improve tax collection and road infrastructure, we question which public service this tax will serve, given that the Kenya Roads Board already collects a Road Maintenance Fuel Levy (RMFL) at Kshs. 8 per litre of petrol and diesel for road maintenance and development.”

“This new tax will increase operational costs for Small and Micro Enterprises (SMEs), impacting their ability to invest in marketing, staff training, and equipment upgrades,” the Bishops said.

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The Bishops said higher input costs reduce profits and SMEs will also face higher credit interest rates and a reduced market share in Kenya and the region due to increased business costs.

The Bishops in Kenya said that the proposed increase in excise duty from 15 percent to 20 percent and VAT on mobile banking transactions will disproportionately affect lower-income customers, pushing them towards cash transactions and informal money storage methods.

The KCCB members said that eco-levy negatively affects the environment, including mobile phones, diapers, microphones, and plastic packaging bags.

“While the government's goal to support the digital and creative economy by ensuring widespread access to smartphones is commendable, this levy could hinder these objectives,” the Bishops said.

In addition, the Catholic Bishops said that “the Bill may inadvertently undermine efforts to combat climate change, as SMEs and individuals might revert to using older, less fuel-efficient vehicles to avoid higher taxes on newer, fuel-efficient, hybrid, and electric cars.”

The Bishops said that though the government is mandated to raise taxes to support public services, the measures proposed in the Finance Bill aimed at raising revenue are a cause for concern.

The Kenyan Catholic Bishops lamented about the manner in which taxes that the government keeps collecting are utilized. They also decried what they described as “entrenched corruption” in Kenya’s public institutions and the “wastage of public resources on non-essential activities.”

“It is regrettable that despite pleas to our leaders to implement measures to lower the cost of living and reduce suffering, a significant portion of tax revenues ends up in the pockets of a few well-connected individuals,” they said.

“We observe that addressing corruption and halting the wastage of available resources would generate sufficient revenue to support essential services, thereby reducing the burden on Kenyans who are already struggling with a high cost of living,” the Bishops said.

They acknowledged with regret that some businesses are already shutting down, relocating to other countries, and laying off employees due to the effects of the taxes that are already in place.

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The Catholic Church leaders appealed to the parliament to heed the people's cries and revise the contentious clauses in the Finance Bill 2024, saying, “In the spirit of the Social Teaching of the Catholic Church, which emphasizes a preferential option for the poor, we reject any law that adversely affects the poor and impoverished.”

“The government has a responsibility to ensure that the citizens enjoy basic needs by initiating policies that serve the common good of the nation,” the Bishops said. 

Silas Mwale Isenjia is a Kenyan journalist with a great zeal and interest for Catholic Church related communication. He holds a Bachelor’s Degree in Linguistics, Media and Communication from Moi University in Kenya. Silas has vast experience in the Media production industry. He currently works as a Journalist for ACI Africa.