Thousands of people will lose their jobs if Finance Bill 2024 is passed

Kenya Association of Manufacturers (KAM) CEO Anthony Mwangi has warned that the country’s production and manufacturing sector could collapse if the 2024 Finance Bill is passed into law.

Mwangi said this in an interview with Citizen TV on Tuesday. The bill will hit the industry hard as it imposes heavy taxes on raw materials and production services..

Mwangi warned that the proposed tax changes could lead to up to 3,000 Kenyans working in various factories losing their jobs.

“The lives and jobs of all 3,000 people who work in these factories are at risk and this concerns many products. My message is, policymakers please talk to the industry before making these proposals. Please visit the factories,” Mwangi said.

Mwangi stressed that manufacturing is a key pillar of the Kenyan economy, generating the majority of jobs and a significant portion of income.

Kenya Association of Manufacturers CEO Anthony Mwangi speaks at a gathering on reinvigorating small and medium-sized enterprises in June 2023.

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Came

He criticized the government’s decision to impose the tax. Required Inputs and Financial Services Mwangi rejected policies that would boost production, arguing that such policies would discourage investment. “The proposals in the bill are taxes, not incentives for production,” he said, stressing the need to widen the tax base through increased production rather than punitive taxation.

Citing the adverse impact the 2023 Finance Bill will have on paper exports, Mwangi expressed fears that the bill will make Kenyan products less competitive in East Africa and beyond.

He noted that rising production costs would make imports more attractive and undermine local manufacturers. “Under the Finance Act 2023, we were exporters of Kenyan paper and packaging materials, but with the addition of the 10 percent Export Investment Promotion Cess, we are now importers,” he lamented.

He added, “Let’s do an impact assessment of the regulation immediately and see how it will affect the country. If we are not careful, we will become the biggest supermarket in East Central Africa because we are a big market and we cannot compete. Our power is overwhelming compared to our neighbours. Taxes are high and we have spoken to the government and they have said if you are transporting goods from Mombasa to Malaba, you have to pay tax every time you cross the county line. This is ironic.”

The 2024 Finance Bill, introduced by Moro State MP Kimani Kuria, proposes several new taxes, including an automobile distribution tax and increased excise duties on various goods and services.

Mwangi called on government to conduct a thorough impact assessment of the 2023 Finance Act before going ahead with the 2024 bill, stressing the importance of consulting with industry stakeholders to prevent policies that could be devastating to the manufacturing sector.

The Inter-Ministerial Committee on Finance and National Planning The public and stakeholders are invited to submit comments on the bill by May 18, 2024. And it is currently consulting stakeholders and other Kenyans on the proposed changes to the 2024 Finance Bill.

Moro State Rep. Kuria Kimani will assume the role of Chairman of the National Assembly Joint Committee on Finance, National Planning, Communications, Information and Innovation on April 19, 2023.

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Kenya Parliament