Manufacturers, private sector reject Finance Bill; warn over 100,000 jobs will be lost

The Kenya Private Sector Alliance (KEPSA) is also cautioning that up to 100,000 jobs will be lost, owing to the implications emanating from the proposed Bill. 

KAM and KEPSA, are among the stakeholders who expressed their concerns before the National Assembly Committee on Finance which is gathering public opinion from members of the public and private sectors.

The proposed Finance Bill 2023 which is at the public participation stage came under scathing objection from members of the private sector who expressed their concerns before the National Assembly Finance Committee. 

KAM told the parliamentary watchdog that the country is on the brink of losing up to Ksh.150 billion through an impending mass exodus from the Kenyan market, due to what they term will be double taxation if the Finance Bill 2023 becomes law. 

“As much as we want to protect local manufacturing, doing this before we are ready is just handing over the market to other people, Egyptians, Chinese and other people,” KAM CEO Antony Mwangi said.

“Clearly if this levy is imposed in Klinker, the cost of cement will shoot up and will be suffered by the local mwananchi. 70% of people who buy cement are the local mwananchi who buy one bag to build houses. These are the people who are going to suffer most.”

KEPSA on its part argued: “This creates a very uncertain environment for business, it will defeat the attractiveness of Kenya as an investment destination. How will someone go to a market where you are not sure how tax disputes will be handled...where before doing anything already 20% is deducted.”

"This is going to impact immediately. And it has started already because when people who are doing exporting and importing are doing this, it's signalling. They have started making their orders from elsewhere. This is a bill that will kill the packaging industry in Kenya," KAM added.

The Kenya Private Sector Alliance warns that up to 100,000 jobs will be lost as a result of business closure due to high taxation.

“We are asking the national assembly to strike out this proposal so that we can remain with the existing proposals for running our businesses,” KEPSA stated.

“This is approximately 70% of all the assessments raised. If the market is to deposit 20 out of 70 per cent of all the taxes, then you can imagine the cash flow implication. This will provide the window for rent-seeking, harassment, and unfairness.”

The Petroleum Outlets Association of Kenya (POAK) similarly lamented to members of the Finance Committee how the margins will be eroded by an additional 17 per cent additional on petroleum products. 

“We are already paying 20% in the form of withholding tax. We will shut our businesses,” stated POAK.

The National Assembly departmental committee will on Thursday get submissions from KUPPET, Trade Union Associations and Kenya Airline Pilot Association as the public participation stage into the bill enters day four.