Activist Okiya Omtatah has moved to court to sue Treasury over the recently unleashed tax scheme brought about by the Finance Bill 2018.
Omtatah is seeking to have any tax proposed in the Finance Bill suspended on grounds that treasury CS Henry Rotich did not follow the requisite legislative process before it’s implementation, saying the move will subject the tax payers to haphazard tax increment that have not been approved by parliament.
“All Bills must go through the legislative process that includes public participation before they become law. Purporting to give the CS (Mr Rotich) powers to temporarily amend the national tax revenue statutes through a finance bill without having it first go through the legislative process to become law as explained is unconstitutional, and therefore invalid, null and void,” Mr Omtatah said.
Treasury has unleashed a myriad of tax hikes to raise revenue for the Three Trillion budget read in June. Excise duty rates were increased by five per cent.
Treasury’s alteration on exercise duty rate has also pushed up prices of drinking water, alcoholic drinks, mobile money, kerosene and increased licenses fee for small businesses are some of the products were consumers will pay more in the recently imposes tax increments.
The exercise duty on mobile money for instance, which observes and industry players have criticised as punitive, has been increased to sh 12 up from sh 10 while that of kerosene has been raised from Sh7.21 per litre to Sh10.31 to match that of diesel, with low-income households that use kerosene for lighting and cooking the most affected.
MORE REVENUE BUT AT WHAT COST ROTICH?
Rotich argued that the new avenues will raise revenue collection by 17 per cent but perhaps what the government is playing blind to is the strain it’s putting the already heavily taxed taxpayers.
“With revenue enhancement measures, we project revenues to rise by 17.5 per cent to Sh1.92 trillion, equivalent to 20 per cent of GDP, in 2018/19 from the estimated Sh1.66 trillion collected in 2017/18,” Mr Rotich said in his Budget speech.