‘It is the right of Gov’t to raise taxes’: CS Moses Kuria defends Finance Bill 2024

Amidst uproar over proposals to raise various taxes to an already overburdened population as contained in Finance Bill, 2024, Public Service Cabinet Secretary Moses Kuria now says it is the right of any government to raise levies as it deems fit.

Kuria, who spoke on Citizen TV’s ‘The Explainer’ show on Tuesday, defended the Kenya Kwanza administration terming the move to increase taxes as its “legitimate right” in a bid to generate revenue for the country.

He argued that a government is constitutionally mandated to raise taxes or borrow from other governments in order to run its operations smoothly if the already existing avenues of raising revenue are not adequate.

“It is the legitimate right of any government, in Kenya or anywhere in the world, to raise taxes, because it is only by raising taxes…there is no any other source of money for a government to run a government, except taxes,” said Kuria.

“When we borrow, we borrow for one reason, because we can’t raise enough taxes..so the only legitimate, bonafide source of money for running government is by raising taxes.”

CS Kuria faulted the Law Society of Kenya (LSK) for threatening to sue the government over the proposals in the Bill, reiterating that no one has the power, whatsoever, to file a case against the State for increasing taxes.

According to the CS, the law does not give an individual or an institution power to stop the government from taxing the people, but it can only stop a form of taxation if it is not lawful or if the people - through the process of a referendum - vote against the process.

He cited the petition by Busia Senator Okiya Omtatah challenging the Housing Levy, noting that the lawmaker only challenged how the levy was implemented but not the entire process.

“The primary mover is the people of Kenya because they are the ones who put us in office; we will listen to people and we will listen to their representatives in Parliament, to stakeholders, industries and private sector, that we are willing to do….what I have a problem with is the position of the LSK; you cannot take me to court for raising taxes…,” said Kuria.

“Omtatah went to court about the Housing Levy. Did he say it is not the right of the government not to raise the levy? No. He said, some things were done in the process of raising the levy that were not constitutional, go and fix them…But the actual injunction about raising taxes is the people of Kenya voting in a general election.”

This comes after LSK on Tuesday warned of potential legal action if the proposed Finance Bill, 2024 passes unaltered, citing the removal of crucial exemptions that undermine past legislative gains.

The key issues the LSK raised included increased excise duty on telephone, internet data, and money transfers from 15% to 20%, a rise in the import declaration fee from 2.5% to 3%, and the removal of exemptions for electric vehicles and others, impacting eco-friendly transport.

The society also highlighted that higher motor vehicle taxes will affect insurance uptake and customer costs, while the Eco Levy will raise business expenses.