National Treasury Cabinet Secretary John Mbadi is eyeing a reintroduction of some clauses from the withdrawn Finance Bill, 2024 in order to put the economy back on track.
This is part of his economic recovery plan.
During a handover ceremony from his predecessor on Monday, Njuguna Ndung’u, Mbadi hinted at the revival of non-contentious elements of the Finance Bill.
Mbadi said that some provisions from the bill are crucial for the growth of this country.
“The country must grow. There are provisions that were in the Bill that would help the Country to grow,” he stated.
The major focus of the Mbadi approach to tax expenditure matters. He zeroed in on the problem of fictitious tax refund claims, which have strained the revenue collection of the country.
“A lot of tax refund claims are fictitious, and we know it, so we must look for ways of reducing tax expenditure,” he said.
To try and remedy this, Mbadi proposed a shifting of the tax subsidy framework. He suggested moving some commodities from zero-rating to exemption. These will be, in particular, those that affect the cost of living but are basic to the consumer.
“There are commodities and items you may not stop subsidising because they are basic, they impact the cost of living, but you can move them to exemption so that you do away with zero-rating of commodities,” he said.
Basically, Mbadi’s plan includes breaking down the Finance Bill’s original proposals and introducing them individually, rather than as one comprehensive bill.
“Our team is already working on some of the proposals that were in the Finance Bill 2024 which we can now put together and see how to take them back to Parliament not as Finance Bill but as other proposals,” Mbadi said.
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To see off these amendments well, Mbadi promised heavy public participation that was seen to be lacking in the first place.
“We must engage with the public to agree on something fundamental. Kenyans, we must discuss and agree that yes, we will give some relief on some important items but let us do tax exemption instead of zero-rating, which ends up benefiting business people and not the consumer”, he clarified.
While the Committee on Appointments of the National Assembly was vetting him for the position, Mbadi reiterated his position and pledged to facilitate economic reforms through targeted legislative amendments.
Though the Finance Bill 2024, he acknowledged, had a few valuable provisions hugely outbalanced by other more contentious measures: “I believe there are good provisions that have been lost in the Finance Bill 2024 that are not contentious, and we can bring them as specific amendments with proper public participation.”.
The CS said the reason for the rejection of the bill by parliament was a failure to effectively communicate and engage with the public, which he is determined to tackle on the revised proposals.
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