The cost of living is expected to increase even further as the government aims to increase its revenue from taxes collected through the 2023 Finance Bill which seeks to amend various tax and duties laws to finance President Ruto’s Ksh3.6 trillion 2023/2024 budget.
In the budget, the government plans to collect a total of Ksh2.4trillion through the Kenya Revenue Authority (KRA) from Ksh2 trillion which was being targeted in this Financial Year (FY).
If the Bill will see the light of day, teachers will brace for hard times ahead considering that in June 2021 the unions signed a non-monetary Collective Bargaining Agreement (CBA), which they are currently pushing for its renegotiation.
The teachers through their unions have vehemently opposed the Bill sating that it will negatively affect them considering that the increased taxes are coming at a time when they are yet to receive any salary increment.
In achieving the set revenue ceiling, the Bill is proposing to amend, among others, the Income Tax Act, Value Added Tax Act, 2013 (VAT Act), Excise Duty Act, 2015 and Betting, Gaming and Lotteries Act to increase the country’s tax rates and expansion of the tax base to help the government get more revenue.
A look into the Finance Bill, 2023 that was read for the first time in the National Assembly on May 4, 2023 and highlights done by PricewaterhouseCoopers Limited for purpose of general information, the Bill proposes an increase of VAT on petroleum products and excise duty be applied at 16 per cent from the current 8 per cent, a move that if adopted by legislators will push the prices of basic commodities above the current historical highs.
However, the Bill has exempted Liquified Petroleum Gas (LPG) from VAT taxation which will in effect lower its cost making it more affordable to Kenyans since it is the main source of energy in many households and is a cleaner source of energy with health and environmental benefits.
The Bill has also proposed to increase excise duty on fees charged for money transfer services by cellular phone service providers to 15 per cent which currently is being charged at a rate of 12 per cent to harmonize the fees charged for money transfer services by them and payment service providers to the rate charged on money transfers by other financial institutions.
Other proposals include cosmetics such as human hair, wigs, false beards, eyebrows, eyelashes and artificial nails will begin attracting excise duty at the rate of 5 per cent.
The Bill proposes to increase excise duty on gaming, betting, price competitions and lotteries from 7.5 per cent to 20 per cent with the aim of raising tax nettings from the gaming industry.
Any amount charged in the process of a loan issuance by a digital lender will be the subject of excise duty which is levied at 20 per cent, 15 per cent of payments made to digital content creators will be withheld (withholding tax) with taxpayers making the payments being required to withhold the tax, 35 per cent tax band for earners above Ksh500,000 implying that high-income earners will pay more as pay-as-you-earn (PAYE) and 3 per cent housing levy among others.
Kenya Union of Post Primary Education Teachers (KUPPET) Vihiga Executive Secretary in a letter dated May 8, 2023 to the Clerk of National Assembly opposed the Bill demanding that proper consultations compliant to the constitution provisions of public participation be done with a view of taking input from taxpayers including teachers in order to effect amendments to the Bill as diligently due.
“We wish to oppose the Finance Bill No. 14 of 2023. The Bill, if implemented in its current format, will hurt the economic situation of our members to unimaginable irredeemable levels. Top on the proposals is a 3 per cent housing levy whose mode of implementation is not only unreasonable but equally outrageous and out rightly unconstitutional,” said Sabala
“Take note that all our 2,503 KUPPET members in Vihiga County are strongly opposed to this Bill in its entirety. Instead, our members are waiting, for the government to offer a pay increase as promised in their own campaign manifesto. The purpose of this petition is to persuade your office from presenting this Bill to the floor of the House in its current format,” he added.
Kenya National Union of Teachers (KNUT) Secretary General Collins Oyuu noted that teachers are demanding a pay rise if their salaries are going to be deducted adding that they want their existing 2021-2025 CBA to be reopened to factor in a pay rise to cushion the teachers.
“Teachers, civil servants and their unions have vehemently expressed their negative opinion over the same unless the employer and government think of improving their salaries. The last time teachers were compensated was in 2017,” said Oyuu.
“Teachers’ pay-slips are already strained and may not have any strength left to support any other program unless something is done in terms of salary increment. It is against this background that Kenya National Union of Teachers made a 60% salary increment proposal to the employer in the 2021-2025 CBA,” he added.
Oyuu stated that teachers should be reached through their union for their opinion to count in decisions that affects their lives as indicated under the Public Participation Act of 2018 adding that Kenya is of age to normalize involving affected persons in decisions that matter in their lives.
By Education News reporte
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