CS John Mbadi Hints at Reviving Key Elements of Rejected Finance Bill 2024

National Treasury Cabinet Secretary John Mbadi suggested that President William Ruto’s administration might revisit and potentially reintroduce certain tax proposals from the controversial Finance Bill 2024. Despite the bill being withdrawn following intense public opposition, Mbadi emphasized that some of its provisions, particularly those designed to bolster domestic industries and streamline tax collection, are still valuable and warrant reconsideration.

The Finance Bill 2024: A Controversial Past

The Finance Bill 2024, introduced earlier this year, sparked widespread public outcry, leading to its eventual withdrawal. The bill contained several contentious clauses, including the imposition of an excise duty on imported sugar, which was proposed to increase from Ksh.5 to Ksh.7.5 per kilogram. Critics argued that the bill would place an undue burden on consumers and businesses, particularly in an already challenging economic environment. The public backlash was swift and severe, resulting in the bill being labeled as “dead” and subsequently shelved by the government.

The Case for Revisiting Key Provisions

Despite acknowledging that the Finance Bill 2024 is considered “buried and withdrawn,” Mbadi argued that certain provisions should be revisited for the benefit of the country. He specifically highlighted the proposal to increase excise duty on imported sugar as a measure aimed at protecting local farmers and promoting the domestic sugar industry. “Why would one reject an amendment to increase excise duty on imported sugar from Ksh.5 to Ksh.7.5 per kg to protect our sugar industry, just because it was in the Finance Bill 2024? Those are progressive provisions in the law,” Mbadi asserted.

Mbadi’s stance reflects a broader concern within the government about the need to support local industries while ensuring that tax policies are fair and effective. He stressed that the government is not rushing to reintroduce these measures but is instead taking a cautious approach to ensure that any new proposals align with the country’s broader economic goals.

A Strategic and Gradual Approach

Mbadi made it clear that the government does not intend to reintroduce all the measures contained in the original Finance Bill 2024 in a single piece of legislation. Instead, he suggested a more strategic approach, where certain proposals might be more appropriately addressed under specific sectors, such as trade and industry. This method would allow the government to focus on targeted interventions that promote growth while minimizing potential disruptions to the economy.

“There is no emergency. We have a legal framework in place to collect our taxes. We must find a way to reintroduce certain progressive elements from the Finance Bill 2024 in a manner that promotes growth and streamlines tax administration,” Mbadi said. He also noted that the process of legislation is continuous, with no strict timelines, allowing for thoughtful consideration of each proposal’s potential impact.

Moving Forward: Balancing Revenue Needs with Public Sentiment

The remarks by Mbadi come just weeks after he hinted at possibly reinstating some of the clauses from the withdrawn Finance Bill 2024. After taking over office from former Cabinet Secretary Njuguna Ndung’u, Mbadi highlighted the importance of maintaining a robust tax expenditure system to foster national development. He pointed out that some provisions in the contentious bill were aimed at addressing long-standing issues related to tax expenditure and leakage, which have been a significant concern for the government.

Mbadi’s cautious yet firm approach indicates that while the Finance Bill 2024 may be dead, the ideas it contained are not. The government appears committed to revisiting certain proposals in a manner that balances the need for revenue with the public’s concerns. As Kenya continues to navigate its economic challenges, the government’s ability to craft and implement effective tax policies will be crucial in driving sustainable growth and development.

In conclusion, while the Finance Bill 2024 may no longer be on the table, its legacy lives on as the government explores ways to introduce necessary reforms. Mbadi’s remarks suggest that Kenyans should expect a measured approach, with the administration carefully weighing the benefits of each proposal against the potential impact on the economy and society.