The Kenya Association of Manufacturers and Kenya Private Sector Alliance want the imposition of a 10% export levy dropped on imported smooth brown wrapping paper, which is used to package staple foods like maize and wheat.
“This levy will spike the cost of commodities,” said Antony Mwangi, CEO Kenya Association of Manufacturers, even as the majority of Kenyans struggle to afford basic commodities over high prices.
“We shall face an uncertain environment for business,” Mwangi told parliamentarians.
Through the bill that will be tabled in Parliament this week for debate, the government is also proposing to import tax-free cooking oil, sugar, wheat and beans.
This administration wants to strangle Kenyans. Our MPs will not be part of that bill
For its part, the Federation of Kenya Employers (FKE) is also opposing the proposals, saying the government did not consult the body that brings together all private employers in the country.
If the bill goes through, employers are expected to contribute to the 3% housing levy for employees.
Jacqueline Mugo, the president of FKE, said to ensure compliance with the new rules, employers will have to review salaries.
“This will force employers to review their financial strategies. This will demoralise the same staff we are trying to protect,” said Mugo.
Ruto sticks to levy:
— Citizen TV Kenya (@citizentvkenya) June 2, 2023
President Ruto sustains push for the house fund. Ruto urges private sector to support housing levy. Ruto meets governors and private sector players #FridayNight @lillian_muli pic.twitter.com/iR30wiuwIr
According to John Obure, an economic and political analyst, Ruto’s administration should not ignore these warnings, but instead engage the local and foreign investors for consensus.
Obure warns that if amendments to the tax proposals are not made, ordinary Kenyans will bear the brunt.
“Parliamentarians should consider the poor Kenyans. These proposals have been rejected by the people and key stakeholders,” he tells The Africa Report.
Ruto bullish on finance bill
Despite the pressure, the president insists that the proposals are people-centric and that they seek to address the challenge facing ordinary Kenyans.
“Don’t bow to pressure from the opposition to vote against the interests of the people,” Ruto told MPs from his Kenya Kwanza party.
Raila Odinga, the leader of the opposition, describes the raised taxes as punishment for Kenyans.
“This administration wants to strangle Kenyans. Our MPs will not be part of that bill,” says Odinga, warning that on Thursday he will announce more measures against the Ruto administration.
Opposition Senator Okiya Omtatah has filed a case in court challenging sections of the bill that he says threaten the right to access justice and violate the constitution.
Omtata cites Article 209 and 210 of the Constitution saying any increase in taxation can only be done through legislation in parliament.
“The power to impose taxes is not absolute. It is a donated power by the people to the executive,” he said in his submission to court.
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