Bankers have raised alarms about potential job losses in Kenya, attributing their concerns to the proposed Finance Bill. The bill seeks to introduce a Value Added Tax (VAT) on foreign exchange, a move that could significantly reduce investments in the country.
Financial managers believe this proposal could trigger a mass departure of investors, adversely impacting employment. Raimond Molenje, the Acting Chief Executive Officer of the Kenya Bankers Association, voiced his fears, warning that the bill’s passage would severely curtail the country’s foreign exchange earnings.
“Introducing VAT on foreign exchange transactions poses a significant issue,” Molenje stated during a networking forum in Nairobi last Thursday. He described the proposal as a hindrance to economic growth and urged the National Treasury to reconsider, emphasizing the need for foreign currency to facilitate imports.
“If this bill takes effect, it will exacerbate the challenges we’ve faced with the Kenyan shilling’s value over the past year, where it reached 160 against the dollar,” Molenje added, stressing the importance of maintaining currency stability.
The contentious bill has sparked mixed reactions across various economic sectors. Following the conclusion of public participation, many taxpayers are now urging lawmakers to reject the bill.
“We are appealing on behalf of companies to the National Treasury to maintain the current transaction framework,” Molenje pleaded. He also criticized provisions aiming to eliminate specific manufacturing exemptions, arguing that such tax proposals would render Kenya a “very expensive” destination for investors.
The forum, organized by the Lilian Ngala Network, brought together professionals, including financial experts, to encourage youth to embrace creativity and invest in social capital. Lilian Ngala, the organization’s Director, highlighted the importance of networking for capacity building, which is crucial for career and professional development.
“We are preparing our youth from colleges and universities for employment and empowering those already employed to enhance their skills and take on more responsibilities,” Ngala stated.
As the debate around the Finance Bill continues, stakeholders across different sectors are closely monitoring its potential impact on the economy and employment.