Finance Bill 2023: Did public participation matter?

The opinions of a majority of stakeholders who opposed the Finance Bill 2023 in its entirety during the Public Participation Stage were either ignored or rejected by the National Assembly Finance Committee.

Majority of the submissions by various entities and individuals openly objected to the contentious bill, most of them to the housing levy and 16% VAT increment on petroleum products.

But the report tabled by the Kimani Kuria-led committee appears to have incorporated none of those views. So did the Public Participation Sessions really matter? 

Part of the 1080 memoranda the National Assembly Finance and Planning Committee received during the 9 days Public Participation Stage of the Bill included submissions from members of the public stakeholders from the various sectors of the economy including agriculture, manufacturing and labour.

The initial 3% proposed Housing Levy and 16% VAT on Petroleum products were among clauses that were most contested by stakeholders.

For instance, the Kenya Association of Manufacturers (KAM) in its submission had proposed that Clause 76, which touches on the Housing Levy, should be deleted since there is need for a framework to guide the implementation and management of the levy.

The association argued that there is need for further consultation on the Housing Levy so that the public can appreciate its intent.

"If this bill passes we will have an industrial mass exodus of investors to other countries such as Egypt, South Africa because of double taxation through manufacturing products such as taxation of Klinker used to produce cement," said KAM in a statement.

The committee observed that the housing fund proposal was amended to make it a tax as opposed to mandatory contribution ....and that the rate was reduced from 3% to 1.5%.

"We will amend the bill to include concerns made by Kenyans. Remember that by the end of the day we have a budget to facilitate which depends on the bill," National Assembly Finance and Planning Committee Chairperson Kuria Kimani said before the House.

A total of 137 submissions from stakeholders objected to the finance bill 2023 in its entirety.

Out of the 89 email submissions acknowledged by the Finance Committee, 87 objected to the introduction of the Housing Levy while only 2 supported the introduction of the Housing Levy on account that it will create jobs.

"The bill will have serious negative implications in the advertising sector which is the major source of revenue for mainstream media," said the Media  Owners Association.

The Finance Committee in its report acknowledged receiving submissions from 9 stakeholders opposing the introduction of the 16% VAT on fuel.

The Chairman of the Departmental Committee on Finance and National Planning Committee had on numerous occasions stated that the views of stakeholders on the Finance Bill 2023 will be taken into consideration, promising that the public participation stage of the bill was not just hot air.

So what really changed during the Committee's week-long report compilation exercise in Naivasha?