- On the proposed 20 per cent excise duty on loans from digital lenders, Azimio says this will make mobile loans expensive as it increases fees charged on such microloans.
- Azimio also holds that the cost of mobile phones will go up by 10 per cent should the 10 per cent excise duty proposed in the Bill be imposed on imported cellular phones.
Image: RAILA ODINGA/TWITTER
Azimio la Umoja coalition has broken down in bits the proposed tax measures in the Finance Bill 2023 and listed all the elements it says are punitive to Kenyans.
In a statement on Tuesday, the Raila Odinga-led outfit termed the Bill "a masterclass in making every Kenyan miserable" saying the Housing levy is just one of the many ills in the Bill.
"Concentrating on the 3 per cent housing levy is like moving the deck chairs on the Titanic! Ruto's Finance Bill 2023 is a masterclass in making every Kenyan miserable. Let's hope there's some kind of 'worse things' discount someplace," the coalition said.
First on Azimio's 'blacklist' is the doubling of the Value Added Tax on petroleum products from the current eight per cent to 16 per cent.
"Increasing VAT on fuel will lead to high fuel prices and raise the cost of living," Azimio said.
Closely related to this, Azimio says the proposed 16 per cent VAT on baby formula will increase the cost of baby milk.
On the proposed 20 per cent excise duty on loans from digital lenders, Azimio says this will make mobile loans expensive as it increases fees charged on such microloans.
"Excise duty on mobile money transactions increased to 15 per cent will increase the cost of mobile transactions using M-Pesa and mobile banking," they said.
Azimio also holds that the cost of mobile phones will go up by 10 per cent should the 10 per cent excise duty proposed in the Bill be imposed on imported cellular phones.
The Opposition coalition has also opposed the Finance Bill on grounds that the three per cent turnover tax on small businesses will see their annual taxes go up.
"Businesses with Sh1,370 sales per day will start paying Sh15,000 tax per year," Azimio said.
Further, the coalition argues that the Bill seeks to reclassify Agriculture products and in effect increase the cost of farm inputs thereby hurting farmers.
Azimio has also opposed the Bill on grounds that it will lead to reduced profit margins in the cosmetics industry if a five per cent excise duty is imposed on beauty products such as wigs, false beards, eyebrows and eyelashes and artificial nails.
On the controversial housing levy, the Opposition says the mandatory three per cent deductible monthly from employees' basic pay will reduce what they take home and the end of the month.
This is in the realization that employees are already burdened with servicing loans and statutory deductions from their basic pay including Pay As You Earn, NHIF and NSSF.
Azimio has also come to the defence of content creators saying and opposing the proposed 15 per cent withholding tax from their earnings.
"The tax is likely to discourage youth considering venturing into content creation as an avenue of employment," they said.
Azimio has also opposed the Bill because the proposed 16 per cent taxation on insurance compensation will reduce the amount of money policyholders will receive as compensation for losses suffered.
In the transport sector, the Opposition outfit has said the proposed scrapping of the 16 per cent VAT on helicopters and aircraft will only serve to help the rich import the hardware more easily while the ordinary Kenyan in the transport industry suffers due to advance tax on motor vehicle importation.
The Bill has proposed a motor vehicle advance tax of between Sh2,400 to Sh5,000 for passenger vehicles and Sh3,000 to Sh5,000 for commercial vehicles.
On May 27, Azimio leader Raila Odinga told the government that it should listen to the voice of the ordinary Kenyan over the proposed taxes or face the consequences of ignoring their plight.
"Kenya Kwanza have two options: face and listen to Kenyans, or ignore them and face a battle Kenyans never seen before in this country," Raila said in a statement.
Ruto has, however, remained adamant on rooting for the Bill saying it will provide finances that will enable him to revolutionise the economy.
Raila on Tuesday held a Parliamentary Group meeting in Nairobi to give the way forward after the bipartisan talks hit a snag last week.
Azimio gave the Kenya Kwanza government until midnight to address their concerns or have the bipartisan talks suspended.
"Kenya Kwanza has until midnight Tuesday, otherwise the talks remain suspended," National Assembly Minority leader Opiyo Wandayi said after the meeting.