Economist and businessman Hussein Dida has punched holes on the Finance Bill 2025, arguing that its proposed measures will disproportionately burden ordinary Kenyans, worsen economic hardship and fail to promote equitable growth for the majority of citizens.
In an interview at Inooro Tv, Dida argued that the bill’s tax proposals, particularly the shift of essential goods from zero-rated to exempt status, will raise the cost-of-living crisis, placing undue strain on the common man.
The Finance Bill 2025 proposes significant changes to Kenya’s tax regime, including reclassifying key items such as fertilizers, animal feeds, pharmaceutical inputs, solar batteries, and locally assembled mobile phones from zero-rated to exempt under the Value Added Tax (VAT) Act.
Tax exemption means no tax is applied to a transaction or entity, with no tax collected or reported. Zero-rating applies a 0% tax rate, requiring tax reporting and allowing input tax recovery, often for specific goods or services.
“The government’s bill, touted as aligning with the National Tax Policy to boost revenue, will raise production costs for businesses, inevitably driving up prices for essential goods and services, a hidden tax hike on the common man,” Dida contended.
Dida said by moving essential items like fertilizers and medicines from zero-rated to exempt, businesses lose the ability to claim input VAT refunds. This means, he explained, higher costs for farmers, patients, and small enterprises, the people who are already struggling to make ends meet.
Dida warned that reclassifying agricultural inputs like fertilizers and animal feeds would raise farmers’ costs, threatening food security. Kenya’s smallholder farmers, important for national food supply, would face significant challenges, leading to higher food prices.
The Subukia businessman also criticized the bill’s proposal to impose VAT on goods or services initially acquired as exempt or zero-rated if they are later used inconsistently with their intended purpose. He argued that this measure, while aimed at curbing tax evasion, introduces complex compliance requirements that could overwhelm small businesses.
Drawing from the public outcry over the Finance Bill 2024, which sparked nationwide protests and led to its eventual rejection by President William Ruto, Dida cautioned that the 2025 bill risks reigniting public discontent if Members of Parliament fail to make necessary adjustments.
“The Parliament must remain independent from the executive to safeguard the rights of ordinary wananchi against oppressive policies. Budgets should prioritize the needs of those at the base of the pyramid, where the ordinary people are,” he urged.
When asked what he could do if he was an MP or in a policy making position, Dida said he would prioritize on ensuring that issues affecting the ordinary people such as the cost of living and health were working, as former President, the late Mwai Kibaki majored on.
Kenyans fear the bill will worsen economic hardship, impacting essentials like medicines and agricultural inputs. The detention of software developer Rose Njeri, who created a tool to oppose the bill, has sparked outrage, with activists criticizing the government’s heavy-handed tactics.
Dida urged lawmakers to reconsider the bill’s contentious provisions and prioritize progressive tax measures that protect low-income households. He stated that the government must balance revenue needs with the welfare of its people and emphasized that tax policies should uplift, rather than oppress, the common man.
Public hearings on the Finance Bill, 2025, have started across counties. The National Assembly’s Finance and National Planning Committee, after a week of Nairobi submissions, invites active participation, beginning engagements in Busia and Migori, then Trans Nzoia and Nandi.
Benjamin Langat, committee vice chairperson, stated that the exercise was not symbolic but vital for shaping the final Bill. He emphasized its importance, noting that the Finance Bill, a proposal to the National Assembly, required public participation to become law. Langat also encouraged citizens to assess the Bill with the proposed budget estimates.