National Treasury and Economic Planning Cabinet Secretary John Mbadi has announced plans to reintroduce certain clauses from the Finance Bill 2024, which was withdrawn, in order to save the country’s economy.
Mbadi, speaking at the handover ceremony from his predecessor Njuguna Ndung’u, emphasized the importance of revisiting key provisions that could stimulate economic growth while also addressing public concerns.
“Yes, we have lost the Finance Bill of 2024,” Mbadi remarked.
“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.”
However, he hinted at the possibility of reviving some of its non-contentious elements.
“The country must grow. There are provisions that were in the bill that would help the country to grow.”
Mbadi’s approach includes addressing the issue of tax expenditure.
The new Cabinet Secretary highlighted the prevalence of fraudulent tax refund claims, which have hampered the country’s revenue collection efforts.
“A lot of tax refund claims are fictitious, and we know it, so we must look for ways of reducing tax expenditure,” Mbadi asserted.
To combat this, he proposed a change to the tax subsidy framework.
“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.”
Mbadi’s strategy entails breaking down the Finance Bill’s original proposals and reintroducing them as standalone amendments rather than a single comprehensive bill.
“Our team 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,” he said.
To ensure that these amendments are well received by the public, Mbadi promised extensive public participation, which was deemed lacking in the initial process.
“Kenyans, we must discuss and agree that yes, we will give some relief on some important items but let us do tax exemption instead of zero rating, which ends up benefiting business people and not the consumer,” he explained.
During his hearing before the National Assembly’s Committee on Appointments, Mbadi reaffirmed his commitment to economic reform through targeted legislative amendments.
He admitted that the Finance Bill 2024 included useful provisions that were overshadowed by more contentious measures.
“I believe there are good provisions that have been lost in the Finance Bill (2024) that are not contentious, and we can bring them as specific amendments with proper public participation,” he explained.
He emphasized that the failure to effectively communicate and engage with the public played a significant role in the bill’s rejection.
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