National Assembly Finance Committee chairman, Kuria Kimani, in the eye of another storm amid new tax proposals

Molo MP Francis Kimani Kuria is coming out as the poster child of the unpopular bread and vehicle circulation taxes, at least on the floor of the August House.

The legislator, who is also the chairperson for the National Assembly’s Committee on Finance and National Planning, was last week the punching bag for Kenyans on social media after he was emerged as one of the most vocal MPs supporting the new tax measures contained in the Finance Bill , 2024.

His comment that those who cannot pay the 2.5 percent motor vehicle circulation tax can leave their cars at home, appeared to have touched a raw nerve among most taxpayers. Memes were quickly crafted comparing his remarks with the infamous ‘let-them-eat-cake’ line from France’s last queen, Mary Antoinette before the French Revolution came in thick and fast.

Ms Antoinette, who was executed by the revolutionary government, is said to have uttered those words when she was told the peasants were protesting the high prices of bread.

When it rained, it poured for Mr Kimani, one of the youngest legislators. His explanation that the introduction of the 16 percent Value-Added Tax (VAT) on bread was because it caused diabetes only enraged the lynch mob on social media more.

As the chairperson of the Finance Committee and a member of the ruling UDA Party which has sponsored the Finance Bill, 2024 Mr Kuria finds himself in an awkward position.

He is supposed to be impartial and should not appear to be conflicted before he begins collecting views from the public. Yet as a member of the ruling UDA Party, he must not appear to be fighting his party’s policies, although he insists there are many times they have ‘negotiated’ with the National Treasury on some proposals.

His party leader, President William Ruto, has indicated before that he wants total backing from his party members for all the policies that his government brings to Parliament.

Now, Mr Kuria insists his opinion on the proposal or even that of the committee is yet to be heard. That will only be known after the ongoing public participation.

“When I speak, I am explaining that this is what is going to happen, and this is why it has been proposed, Now, what do you think? Don’t lynch the messenger,” said Kimani in an interview with the Business Daily.

Vehicle owners will start paying up to Sh100,000 depending on the value of their cars if Parliament endorses the proposal by the National Treasury to introduce a 2.5 percent annual tax on the value of vehicles, with the deduction set at a minimum of Sh5,000 and a maximum of Sh100,000.

“The tax rate in respect of motor vehicle tax charged under Section 12H (which introduces the tax) shall be 2.5 percent of the value of the motor vehicle,” reads the bill in part.

“The value of a motor vehicle shall be determined on the basis of the make, model, engine capacity in cubic meters, and year of manufacture of motor vehicle,” adds the Bill.

Speaking on NTV’s Business Redefined, Mr Kimani was asked whether the tax was an income or wealth tax. The young legislator said the motor vehicle tax is a hybrid between income and wealth tax.

“It is also trying to factor in a user-pay tax, or a levy…we are saying fine ‘I don’t want to pay the vehicle circulation tax’, then don’t use the car, like we are saying ‘I don’t want to use the expressway’, so don’t pay for it, go through other means,” he explained.

But if this tax is supposed to discourage people from driving and polluting the environment or even causing traffic jams—two negative externalities of driving—then it fails by not taking into consideration such basic economic principles as the concept of marginal utility used by economists to determine how much of an item a consumer is willing to purchase.

Mr Kimani agrees. “That means even when I am not using my car, I will still pay,” said Mr Kimani.

“Why do we have a floor? It means that people with expensive cars will pay less percentage compared to the cheaper cars. How is it going to be administered?”

At 33 years old, Mr Kuria is among the youngest legislators in the 13th Parliament. He first came to the National Assembly when he was just 28 years old under the Jubilee Party.

And given his academic background in Finance, he joined the Finance Committee. He joined Kenyatta University to study Bachelor of Commerce, Finance option, where he graduated in 2011 before moving to Strathmore University to pursue a Master of Commerce degree and graduated in 2017. Mr Kimani, who also acquired a Certified Public Accounting, is currently pursuing his Ph.D.

When he was re-elected on the UDA ticket in 2022, he was elected to chair the powerful Finance Committee. It was a baptism by fire for the young legislator. In the Finance Bill 2023, the obsession was with two clauses-increasing VAT on fuel from eight percent to the standard 16 percent and introducing the housing levy at the rate of 1.5 percent.

There are also two controversial proposals in the Finance Bill 2024 out of the 65 clauses –VAT on bread and the vehicle circulation tax.

His pronouncement on the introduction of 16 percent VAT on bread has also put him in the spotlight. He says it is yet another amendment which they have a back and forth with the National Treasury.

“Because the National Treasury is saying the same logic as sugar. That use of sugar and bread causes diabetes. But is that a reason to add VAT on it?”

Mr Kimani is impressed by the level of engagement from the public and would like this public participation to be done through the right channel.

“What will determine whether these proposals will become law is public participation. And public participation is not just on social media. We cannot table evidence of social media in Parliament.”

“There is an advert that was sent out. They (members of the public) are supposed to write to Parliament by email, deliver letters and appear physically during those meetings.”

Once they have received the public views, the committee will decide and present it to the National Assembly. He also insisted that while there are two related bills –Finance Bill and Budget—going through public participation, people are fixed on the Finance Bill.

“The same strength they are talking about taxes, I wish they would have the same strength in talking about expenditures.”

Every clause in the Finance Bill has a revenue implication which is important because there is a budget being passed.

“What’s interesting is, that nobody is saying which budget we should cut. Apart from what I have heard about people complaining about some renovations, everyone else has not said what part of the budget should be struck out.”