Kenyan business community takes bold stand against Finance Bill 2024, paving path to policy influence.

  • 3 Jun 2024
  • 3 Mins Read
  • 〜 by Donald Kogai

There is a silent revolution happening in the business community in Kenya, and it’s being televised.  


Since the Chairperson of the Finance and National Planning Committee of the National Assembly, Kimani Kuria, tabled the Finance Bill 2024 on May 13, 2024, for the first reading and subsequent public participation, over a dozen Business Membership Organisations (BMOs), including various associations, institutes, partner networks and chapters have issued media statements, publicly voicing their concerns about the bill. 


While representing their members is a fundamental role of these interest groups, this year’s assertive stance marks a notable shift in how they engage with the legislative process. It marks a significant departure from past practices and demonstrates that the business community is ready to play a more active and influential role in shaping Kenya’s economic future.


The Finance Bill 2024 introduced several new financial regulations and tax measures that have been met with concern from the business community. Notable concerns have been Motor Vehicle Tax, Withholding VAT, VAT on banking services, Sec. 14 of the Excise Duty Act, clean VAT exemptions impacting the sectors, KShs 2 million/month penalty for eTIMS non-compliance, 25% excise duty on edible oil, and VAT on bread. 


In years past, the BMOs participated in public hearings, tabled their presentations, and then quietly made their submissions without drawing much public attention.


To date, the Association of Kenya Insurers, Petroleum Outlets Association, Kenya Bankers Association, Kenya Association of Manufacturers, Association of Air Operators, The Chamber of Commerce & Industry, Cereal Growers Association,  Association of Edible Oil Manufacturers, and Institute of Certified Public Accountants of Kenya are some of the interest groups that have issued media statements. 


Other interest groups to issue statements are Amnesty International Kenya and Article 19 Eastern Africa, which have expressed deep concerns with Clause 63 of the Bill, which seeks to exempt the Kenya Revenue Authority from the provisions of the Data Protection Act. 


This newfound boldness from these interest groups not only underscores the perceived gravity of the bill’s implications but is also a positive development in influencing policy on multiple fronts. 


First, the proactive and public engagements in this legislative process position these associations as critical stakeholders in the policy-making process. By speaking out loudly, they ensure their members’ interests are considered, potentially leading to a more balanced and informed stance before the bill is finalised.


This is a positive step towards a more engaged and informed legislative process, ensuring that businesses’ voices are heard and considered in the corridors of power. 


Secondly, advocacy is essential in maintaining a business-friendly environment that supports growth and healthy competition and promotes innovation. This year’s bill has several proposals that, while could help expand the tax base, are likely to increase operational costs and regulatory burdens for businesses in an already tough operating environment.  


By publicly voicing their opposition and tabling alternative approaches, these Associations are protecting their members from the adverse impacts. 


Thirdly, the boldness displayed by these BMOs indicates a maturing landscape of business advocacy in Kenya.  For a long time, this was a preserve of just a handful of Associations, mostly Kenya Private Sector Alliance, Kenya Association of Manufacturers (KAM), and Kenya Bankers Association (KBA), who were left to shoulder the burden alongside two to three large corporate organisations.  This new public display is, therefore, a demonstration of maturity in business advocacy in the country. 


Finally, through this vocal approach, the business community is also subtly raising awareness about the potential consequences of the Bill.  In essence, they are alerting consumers to the possible increase in the cost of goods and services. This transparency is vital to managing public expectations and fosters a better understanding of how legislative changes can impact everyday life.


This new pathway to influencing policy decisions is a welcome development. BMOs are finally finding innovative solutions to evolve as they face new challenges that directly impact not only their members but, most importantly, the public.