The fate of taxpayers is now in the hands of the Parliament after Treasury Cabinet Secretary Njuguna Ndung'u unveiled a record Sh4 trillion budget on Thursday.
The exchequer prioritised budget deficit cuts to tame the rising debt that is gobbling up over 50 per cent of the country's ordinary revenue.
Latest government data shows that the country's total debt is at Sh11.3 trillion, accounting for more than 70 per cent of the country's gross domestic product.
In his presentation, the Treasury boss outlined a number of tax measures to help the government raise Sh2.92 trillion locally out of a Sh3.3 trillion.
He detailed the Financial Bill, 2024, proposed revenue mobilisation measures for the financial year starting July 1 that have sparked a national debate, with 87 per cent of taxpayers against it, according to a survey conducted by Infotrak Kenya.
According to Ndung'u, the outlined tax measures are supposed to net in Sh346 billion for the government, slashing borrowing to Sh597 billion, almost Sh400 billion less compared to the current financial year ending June 30.
As Ndung'u presented the budget proposals, the public continued to pile pressure on Members of Parliament to reject in totality the proposed tax measures for the upcoming year.
A social media campaign on X (formerly Twitter), Facebook and Instagram under the hashtag 'Reject Finance Bill' had garnered over 100 million impressions by the time of going to press, according to monitoring firm Alexa.
Social media users shared cellphone numbers of Members of Parliament, calling on their followers to ask their legislators to reject proposed tax measures.
Although the National Treasury scrapped some measures like the proposed introduction of Value Added Tax on bread, members of the public want all proposed taxes dropped.
"We are already paying too much in taxes. The government must stop preaching to us Finance Bills year in year out. Let them use the taxes we are paying prudently,'' X user Dan Okello said.
Another X user, Timothy Kioko, sent a message to his Member of the Parliament James Mawathe of Embakasi East to reject the bill.
"We sent you to the Parliament to represent our interests. We don't want this punitive bill. Kindly vote against it when it is presented," he said on X.
Already, a number of MPs have responded to their electorates, with at least 13 of them promising to reject the bill.
"I have received more than 150 sms and 45 WhatsApp messages from Kenyans asking me to vote against Finance Bill 2024. I assure you that just like in 2023, I will do the needful," Alego Usonga MP Sam Atandi said on X.
"The civic awakening in Kenya is something to behold. I like that citizens are taking up public spaces to express themselves on key matters. Content creators, comedians, everyone is taking up space hitherto hogged by politicos like me and doing a great job at it! You are calling your MPs finally! And before you ask, the standing instruction to ODM party MPs is to reject the Bill," Nairobi Senator Edwin Sifuna said.
Apart from individuals, lobby groups like the Kenya Bankers Association, Kenya Association of Manufacturers and Consumer Grassroot Association have voiced their concerns on specific aspects of the Finance Bill.
Upon realising the growing opposition, the government made minor amendments on the congested Finance Bill, 2024 in a give-and-take strategy meant to quell public outcry.
But it maintained motor vehicle tax at 2.5 per cent or a minimum of Sh5,000 in a move likely to push up transport costs, a vital factor of production.
The government has also introduced Economic Presence Tax of 1.5 per cent, a crafty reincarnation of digital tax in the disputed Finance Bill, 2024.
There is a slight relief for employees who will now pay housing levy as a deductible expense and not as a percentage of gross salary.
Currently, all employees are paying 1.5 per cent of their gross salaries towards owning a house, matched at similar rate by employers.
The state has also tactfully spared mobile money users from raised transaction charges, maintaining excise duty at 15 per cent. However, all other financial transactions including bank charges will go up by five per cent if the current tax proposal sails through.
Furthermore, the government has maintained the climate tax which is expected to see products and those packaged in plastics go up.
Even so, it has removed import duty on eggs, potatoes and onions originating from EAC partner states subject to goods meeting the EAC rules of origin.
This is likely to see the cost of those food commodities drop, easing inflation.
In order to meet local demand and enhance food security on key staple foods, Kenya was granted an extension of the current stay of application to import rice at a duty rate of 35 per cent or $200 per metric tonne whichever is higher for one year instead of EAC CET rate of 75 per cent or $345 per metric tonne whichever is higher, and also to import wheat at a duty rate of 10 per cent instead of 35 per cent for one year under the EAC Duty Remission Scheme.
Apart from local taxes, the government is planning to raise money through ministerial appropriations-in-aid amounting Sh426 billion while expecting a total of Sh51.8 billion or 0.3 per cent of GDP in grants from development partners.
This will push total revenue to Sh3.34 trillion..
Out of the total budget, Prof Ndung’u said recurrent expenditure will amount to Sh2.84 trillion while development expenditure including allocations to domestic and foreign financed projects, Contingency Fund and Equalisation Fund will amount to Sh707.4 billion, equivalent to 3.9 per cent of the GDP.
Counties will receive Sh401 billion, the highest amount since the advent of devolution.
All eyes are now on Parliament where MPs are expected to debate and vote on the bill before being presented to President William Ruto for assent.
This is expected to be done before July 1 as some of the proposed tax measures will immediately come into effect.