11/06/2024
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KENYA OF CATHOLIC BISHOPS
KENYA CATHOLIC SECRETARIAT
Waumini House, Westlands
P.o. Box 13475 - 00800, Nairobi KCCB Office Line: +254 704 950 223
Email: [email protected] [email protected]
Website: www.kccb.or.ke Our Ref:
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A CALL F0R REVIEW OF THE FINANCE BILL 2024
"And do not oppress the widow or the orphan, the stranger or the poor; and do not deoise evil in your hearts against one another" (Zachariah 7:10)
We, the Kenya Conference of Catholic Bishops, having deeply reflected on the state of our nation and the implications of the Finance Bill 2024, wish to state the following:
It is our considered view that the Finance Bill 2024, if passed in its current form, will be oppressive and cause untold suffering among Kenyans. While we appreciate that the Government has a responsibility to raise taxes to support public services, we are deeply concerned about several proposed measures in the Bill aimed at raising revenue. Further, we are troubled by the entrenched corruption in our public institutions and the wastage of public resources on non-essential activities.
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 government has a responsibility to ensure that the citizens enjoy basic needs by initiating policies that serve the common good of the nation,
Upon reviewing the Finance Bill 2024, we have identified the following critical issues:
1. Basic Commodities
The Bill affects basic commodities such as bread, negatively impacting the poorest in our community. In the spirit of the Social Teaching of the Catholic Church, which
INCORPORATING: THE GENERAL SECRETARY'S OFFICE
I. Commission for Doctrine, 2.Commission for Liturgy, 3.Commlssion for Missions, 4. Commission for Pastoral and Lay Apostolate (Family Life National Office, National Youth Officer)
5. Commission for Inter-Religious Dialogue and Ecumenism (CIDRE), 6. Seminary Episcopal Commission, 7. Commission for Clergy and Religious (Liaison Committee)
8. Commission for Education and Religious Education (CIRE), 9. Commission for Promoting Intergral Human Development-CPIHD (Catholic Justice and Peace Department.
Catholic Health Department of Kenya, Caritas Department of Kenya, Refugees, Migrants and Seafarers Department), 10. Commission for Social Communications, 11. Council for Economy 12. Ad-Hoc Commission for AIDS Relief (KARP), 13. Canon Law National Office
"Vou shall be my Witnesses", (Acts 1:8) for the Sanctification and Salvation of alt People.
emphasizes a preferential option for the poor, we reject any law that adversely affects the poor and impoverished.
2. Motor Vehicle Tax
The Bill introduces a 2.5% tax on the value of motor vehicles. 'lihis new tax on already-owned vehicles, in addition to existing taxes, will burden the common person by increasing public transport fares. 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 liter 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. 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.
3. Impact on Current Climate Change Mitigation Efforts
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.
4. Financial Transactions
The proposed increase in excise duty from 15% to 20% and VAT on mobile banking transactions will disproportionately affect lower-income customers, pushing them towards cash transactions and informal money storage methods.
5. Eco Levy
The Bill proposes an eco-levy on goods that negatively impact the environment, such as 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.
Given the current economic challenges, it is our opinion that the proposed punitive taxes are likely to devastate the economy and impoverish the majority of Kenyans. 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.
We therefore urge the government to establish a tax regime that is predictable and conducive to economic growth, rather than one that stifles the private sector and overburdens the poor and vulnerable. We are concerned that businesses are shutting down, relocating their manufacturing plants to other countries, and laying off employees. We urge our Members of Parliament to heed the people's cries and revise the contentious clauses in the Finance Bill 2024.
CATHOLIC BISHOPS
7 th June 2024