Following Kenyans’ strong rejection of the Finance Bill 2024, which led to protests in Parliament, President William Ruto’s administration has developed a new approach to prevent further unrest.
The National Treasury has called on Kenyans to share their opinions on proposed legislative changes aimed at alleviating the current economic crisis.
As part of the budget preparation for the 2025-26 financial year, Treasury is seeking input from the public, national and county governments, NGOs, civil societies, professional organizations, the private sector, religious groups, and other stakeholders.
Treasury Cabinet Secretary John Mbadi is particularly interested in suggestions on how to finance county governments, especially in light of pending laws that authorize the release of funds.
The Treasury seeks proposals to avert potential cash crises that could hinder service delivery in counties if the Division of Revenue Bill and the County Allocation of Revenue Bill are not passed by June 30.
“These proposals will guide reforms in revenue administration and legislative reviews by the National Treasury to promote inclusive economic growth for the benefit of all Kenyans,” stated Mbadi.
He also invites recommendations for legislative and administrative reforms aimed at enhancing the social and economic well-being of citizens, considering the current debt situation while striving for sustainable public debt without overburdening Kenyans.
The government is particularly interested in input on legislation that ensures fairness in taxation, provides tax amnesty where appropriate, and reduces tax expenditures.
Submissions can be made in hard copy to the Treasury or via email to submissions@treasury.go.ke by October 4, 2024.
This initiative aims to address tax costs that diminish revenue available for projects enhancing the welfare of all Kenyans.
Mbadi has also requested ideas for reforming tax administration to improve collection and compliance, ensuring every taxpayer contributes their fair share by reducing tax evasion and avoidance.
The setback following the Finance Bill’s failure, which resulted in a projected revenue loss of over Sh340 billion, has exacerbated the budget deficit and led to funding cuts for state entities, affecting essential projects and interventions.
Counties have yet to receive this year’s allocations due to delays in passing the Division of Revenue Bill, 2024.
The government aims to incorporate public feedback to navigate challenges cited by judges in various legal cases regarding proposed taxes.
Mbadi highlighted the legal requirement for public participation in policymaking, as outlined in Section 35(2) of the Public Finance Management Act (Cap. 412A), which mandates public involvement in the budget process.
The government acknowledges the importance of balancing the burdens and benefits of resource allocation, revenue generation, and equitable expenditure management.
“Article 201(a) of the Constitution emphasizes the principles of public finance, which mandate transparency and accountability, including public participation in financial matters,” he noted.
The adequacy of public participation in legislative processes was a focal point during last week’s appeal regarding the 2023 Finance Act, where Busia Senator Okiya Omtatah argued that Parliament must justify its decisions on public proposals.
