The Finance Bill of Kenya 2023 has sparked concerns among Kenyans, particularly regarding its tax provisions. The bill aims to increase government revenue through amendments to tax laws and duties. However, these changes have raised questions about their impact on financial inclusion and economic empowerment in the country.
Financial inclusion, defined as access to affordable and sustainable financial services, is vital for individuals, households, and businesses. It promotes economic opportunities and empowerment, especially for marginalized groups. The Finance Bill proposes various tax amendments, including increased income tax rates, a tax on digital asset transfers, and a tax on payments to digital content creators. It also suggests a housing levy deduction from employees' salaries.
Additionally, the bill proposes an increase in value-added tax (VAT) on petroleum products, higher excise duty rates, and changes to tax procedures and import declaration fees. These tax hikes may hinder financial inclusion and economic empowerment in Kenya, given the country's already high cost of living and economic challenges.
To promote financial inclusion and economic empowerment, the government should prioritize inclusive policies and regulations. This includes addressing legal and normative barriers, enhancing digital services, fostering gender-inclusive product innovations, and supporting enabling laws and policies. However, the Finance Bill 2023 lacks a clear framework for implementing these measures.
Financial inclusion can be a catalyst for inclusive economic growth and stability. Therefore, it is essential for policymakers to consider its merits and integrate it into proposed laws and regulations. The current bill does not align with this objective and risks exacerbating poverty and hindering financial inclusion.
In conclusion, the Finance Bill 2023 should be guided by constitutional principles and prioritize reaching and empowering the financially excluded population. Access to financial services plays a crucial role in strengthening the financial sector and driving social and economic development. Policymakers must carefully analyze risks and leverage successful innovations to promote financial inclusion effectively.
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