PUBLIC PARTICIPATION IN FORMULATION OF TAX POLICIES
Camara Castro Ouma
This paper delves in discussing the principle of public participation during implementation of various tax policies. It provides some of the laws that are likely to be amended through various proposals that have been presented in the Finance Bill 2024. It also explores the sovereign power that belongs to the citizens either directly or through their democratically elected representatives. It focuses on providing analysis of the effects of public participation. From the proposals in the Bill, the paper provides the likely impact that the Finance Bill 2024 is likely to incur to the citizens.
INTRODUCTION
“Democracy is not
a spectator sport. It is a participatory event. If we do not participate in it,
it ceases to be a democracy.” – Michael Moore.
The Finance Bill
2024 proposes to amend the Public Finance Management Act, Income Tax Act,
Value-Added Tax Act, Tax Procedures Act, Excise Duty Act, Miscellaneous Fees
and Levies Act, Kenya Revenue Authority Act (Cap. 469) The Bill has raised
different concerns from the members of the public as some have even related it
to introduction of punitive taxes to the citizens. The concerns of the citizens
regarding the Bill can be incorporated only if they participate in the process
either directly or through their democratically elected representatives. This
paper delves into discussing the essence of public participation in relation to
the proposed amendments to various tax laws.
As provided in
Article 1, one of the ways of promoting democracy is through involvement of the
people who have the sovereign power, incorporation of their ideas in matters
that affects them. Introduction of tax directly involves the citizens and there
should be consideration of their views. Article 1 of the Constitution of the Republic of Kenya 2010 gives all the sovereign power to the people. This
underscores the concept of public participation. It underpins it as a way of
involving the people in making of decisions. Articles 10, 35, 118, 119, 124,
201, 221 and 232 have also addressed the principle of public participation.[1]
Accessing of information also aids public participation, this is well
stipulated in Article 35.
Participation enhances democracy as the
citizens are involved directly or indirectly through their elected
representatives. The principles and framework governing public finance is well
outlined in Article 201, there has to be openness and accountability and even
public participation. Parliament as public institution that makes laws has to
be governed by values and principles of public service. Pursuant to Article
232, citizens should be involved in process of policy making.
Every person has a
right to petition Parliament to consider any matter within its authority,
including to act, amend or repeal any legislation.[2]
Petition is basically a prayer, it has to be written and has to be relevant to
the subject matter. The Constitution has conferred right to the citizens to participate
directly in any legislation. The Petition to Parliament (Procedure) Act No 22
of 2012, provides the procedures to be followed during petition to parliament.
Any petition that is submitted to the parliament should be relevant to the
subject matter. The citizens must be able to present their claims in meaningful
and understandable manner to their deliberators.
The citizens of
the republic of Kenya have the right to be involved in matters that affects
them, the principle of public participation is no doubt an important aspect of
legislation process. In the matter of National Land Commission, the
Supreme Court placed the principle of public participation at the core of the
concept of checks and balances in governance and execution of various state
functions. Principle of Public Participation is a great pillar, it fosters
existence of strong democracy in a country and also signifies good governance,
determination of democracy is through involvement of the people.
Implementation of
various tax policies in the country affects inter-state migration, business
community, innovation, investment and also the cost of living. For instance,
payroll taxation affects companies’ decisions to hire. When there is increase
of taxes, it affects the citizens and also it is a threat to employment in the
country. However, the various stakeholders, can present petitions to parliament
so as to avoid the threat to employment and loss of jobs. Introduction of
various policies in the Bill are likely to affect the citizens. The views of
the citizens towards the Finance Bill 2024 can only be addressed if the
citizens participate in every stage of the process, submissions of memoranda
both to the Parliament and even through their elected representatives.
Lack of prescribed legal framework for public participation is no excuse for not conducting public participation; the onus is on the public entity to give effect to this constitutional principle using reasonable means.[3]
Effects of
Public Participation in formulation of tax policies.
Public
participation promotes inclusivity in representation, the citizens are widely
consulted so as to give out their views in relation to proposed legislations.
Their views have to be put into consideration. It is only achieved if the
members of the public are involved in every stage of implementation of tax
policies. Their divergent views should not be understated. Involvement of
people empowers democracy in the society, it fosters the pillars of a
democratic country.
Promotes openness and
accountability. Principle of public participation promotes involvement, it
spearheads the transparency of the process, when participation is done, the
formulations are effective since they are not self-centered. It is a principle
that leads to equity and fairness, when effective participation is done there
is non-discrimination of the citizens during formulation of the policies.
CONCLUSION
The principle of
public participation during formulation of various tax policies is essential. The Finance Bill 2024 entails different proposals that are likely to affect
the tax laws in the country. For instance, the integration of Tax Invoice
Management System (TIMS) and Electronic Tax Invoice Management System (ETIMS)
has not been rapid in the country, implementation of such policy will be costly
to the citizens and even unbearable.
The bill proposes
to do away with different exemptions that are likely to discourage investment
in the country. The Bill is likely to reduce consumption of some services. If
public participation for the Finance Bill 2024, is done differently and
effectively, maybe it can lead to outcomes that are not unbearable to the
citizens. Introduction of Excise Duty on vegetable oils, is likely to increase
the cost of the commodity which will lead to increase in cost of living. The
members of the National Assembly should implement public participation in the
formulation of tax policies in the Finance Bill 2024 with goodwill.
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