President William Ruto has attributed the significant public opposition to the Finance Bill, 2024 in Kenya to inadequate communication. According to Ruto, his communication team may have fallen short in providing sufficient information about the new tax measures introduced in the Bill.
He acknowledged that better communication could have helped clarify the content of the Bill and its potential economic impact, suggesting that with proper explanation, every Kenyan would have supported his stance.
“We did not explain ourselves better, I am sure my communication team failed, and our communication architecture did not deliver. The message did not get out to the people,” he stated.
He cited the land issues which he noted many had argued was in the Bill yet this was untrue.
The rejection of the bill, Ruto said, is now a big blow to the government noting many programs and services will be affected.
Counties, for instance, he said will have to take off Sh30 billion of their budget and the constituency development fund is set to be reduced by Sh10 billion.
“It means we have to rethink about what to do with Junior Secondary School teachers and put on hold the hiring of an additional 20,000 teachers this financial year,” he said.
The Bill, Ruto added, had provisions that would have stopped the importation of potatoes onions, or eggs from Europe.
“It says we should be growing our industries, we should be manufacturing diapers in Kenya and we have 10 companies doing that,” the President said.
“We should be expanding our manufacturing capacity that is what Finance Bill was talking about.”
Speaking during a presidential round table, Ruto was, however, optimistic that they would still bounce back once discussions through the multi-sectoral forums commence.
While announcing the withdrawal of the bill last Wednesday, the head of state proposed that within the next 14 days, a multi-sectoral, multi-stakeholder engagement would be held to chart the way forward on matters relating to its content.
The discussion, he added, will also include the auxiliary issues raised in recent days on the need for austerity measures and strengthening our fight against corruption.
“There is a need for us as a nation to pick up from here and go into the future and because we have gotten rid of the Finance bill, it is necessary for us a nation going forward to have a conversation on how to manage the affairs of the country together, our debt situation and the budget deficit that exist,” he said.
The rejection of the bill followed widespread protests in the country.
Efforts by Kenya Kwanza to drop some of the new contentious tax measures on the bill fell on deaf ears as Kenyans insisted on rejection of its entirety.
Some of the proposals that had been removed are 16 per cent VAT on bread, Excise duty on vegetable oil, VAT on transportation of sugar, 2.5 per cent Motor Vehicle Tax and Eco Levy on locally manufactured products.
The eTims was receded from farmers and small businesses with a turnover of below Sh1 million while Excise duty was imposed on imported table eggs, onions and potatoes to protect local farmers.
The government also dropped an increase in mobile money transfer and VAT on financial services and foreign exchange transactions.
The threshold for VAT registration has been increased from Sh5 million to Sh8 million.
This therefore means that many small businesses will no longer need to register for VAT.
