On 24^th May 2023, KEPSA presented its proposals on the Finance Bill 2023 to the National Assembly Departmental Committee on Finance and National Planning chaired by Hon. Kuria Kimani. KEPSA was represented by the Public Finance Sector Board, led by Mr Steve Okoth and the Head of PPD Ms Agatha Juma in the hearing that was held at a Nairobi hotel.

During the hearing, KEPSA proposed a delayed implementation of the National Housing Development Fund proposal to January 2024 to give room for the formation of regulations to ensure accountability. Further, the private sector proposed that during implementation the contributions should be on a voluntary basis, an approach that would avoid any challenge to private property rights and ensure constitutionality.

On the Export Promotion Levy, KEPSA proposed that the levy should be limited to instances where the items sought to be imported can be sufficiently sourced locally. In addition, the KEPSA team noted that the levy should be aligned with the East Africa Customs Control Management Act that provides for import duty. It was noted also that the introduction of additional levies puts Kenya at a disadvantage as a preferred investment destination, especially compared to EAC and COMESA.

To promote business certainty through appropriate Tax Dispute Resolution Mechanisms, KEPSA noted that the proposal that requires parties to deposit an amount equal to 20% of the disputed tax or security with the Commissioner, should be deleted in entirety. The private sector asserted that the proposed clause would infringe on the right to justice enshrined in Kenya's Constitution and would significantly affect taxpayers' cash flows.

Other proposals that were made by KEPSA included the promotion of Kenya as a services hub; affordable petroleum products to cushion the ordinary Kenyan and reduce the living cost; improving compliance for increased revenue collection; stability in the taxation regime in the gaming sector; excise duty on sugar and advertisement; promotion of the local motor vehicle manufacturing industry; and promotion of best practices to support agriculture and the pharmaceutical industry.

The KEPSA abridged memorandum can be accessed here: https://bit.ly/3WvoQtv