Treasury Cabinet Secretary John Mbadi has disclosed that the National Treasury is considering some of the proposals that were in the Finance Bill 2024 to stabilise the economy.
Speaking on Monday, August 12, while taking over from his predecessor, Prof. Njuguna Ndung'u, Mbadi said that the bill had provisions which would have helped the country to grow economically.
“Yes, we have lost the Finance Bill 2024. It will be wrong and an abuse to the people of Kenya if you tell them that you are reintroducing that bill. We cannot reintroduce it despite the progressive provisions in it. But the country must grow. There are provisions in that bill which would have helped the country to grow," Mbadi remarked.
The CS noted that the Treasury was working some of the proposals for forwarding to parliament, but not as a Finance Bill.
"Our team around here is already working on some of the proposals that were in the Finance Bill 2024 which we can now put together and see how to take them back to parliament not as Finance Bill but as other proposals. We will have extensive public participation," Mbadi stated.
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He specifically pointed out the proposals for reducing tax expenditure, including the removal of zero rating on some commodities.
"One area is the issue of tax expenditure which is leading to tax leakage within it. A lot of tax refund claims are fictitious, and we know it. So we must look for ways of reducing tax expenditure. There are commodities and items you may not stop subsidizing because they are basic, they impact the cost of living, but you can move them to exemption so that you do away with zero rating of commodities which end up clogging our system,” Mbadi explained.
The CS also touched on managing tax refunds, which he said contributed about 65 percent of the country’s expenditure.
"By the way, VAT returns could be contributing about 65 percent of the total expenditure. The total tax expenditure is Sh525 billion. 65 percent of that, say Sh350 billion, is on VAT tax refunds. If we manage that, say Sh200 billion to Sh250 billion, that is money we are giving back to the exchequer to be used for development," Mbadi stated.
