Saturday, April 12, 2025

Finance Bill 2025: Kenyans to use social media to submit views

Kenyans could soon have a new way to weigh in on government budget plans—through social media, Kimani Kuria, the chair of the National Assembly Finance Committee, has revealed.

Speaking this morning on National FM during the Fixing The Nation Show, Kuria disclosed that discussions around the Finance Bill 2025 are taking a more inclusive turn, with early engagement and digital channels being prioritized to enhance public participation and prevent the scenes witnessed in 2024.

“As the new budget process begins, it is encouraging that discussions are taking place before the bills are tabled in parliament. This early engagement ensures that the public has an opportunity to understand the process well in advance, rather than encountering it at the final stages,” Kuria said.

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He pointed out that a major challenge last year—which culminated in nationwide protests—was the delayed public awareness of the Finance Bill 2024’s implications.

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Kimani Kuria: Additional tax measures likely in Finance Bill 2025. Kuria however says the solution lies in cutting expenditure on non-priority items in the budget. #FixingTheNationNTV#FixingTheNationNTV #TikTokKenya

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Finance Bill 2024

In 2024, protests broke out across Kenya after President William Ruto’s administration bulldozed the Finance Bill 2024, which had irked many Kenyans.

The proposals in the budget were intended to raise more revenue to fund the national budget. Among the proposals that sparked public outcry was a clause that would have led to an increase in the prices of bread and baby diapers.

Following the protests, President Ruto withdrew the bill, reverting the country to the provisions of the Finance Act 2023.

“Many felt that public participation had been overlooked, despite it having been conducted earlier,” Kuria noted.

Now, Parliament is making moves to modernize how the public can contribute to shaping the budget. Kuria explained that while town hall meetings—such as those traditionally held at the Kenyatta International Conference Centre (KICC)—have long been the go-to forums, they often exclude many due to time and accessibility constraints.

“Traditionally, discussions were held in town hall meetings, such as those at KICC. However, this method limits accessibility, as many people may not be able to leave their workplaces to attend,” he said.

To widen access, Kuria said that feedback from digital platforms will now be recognized.

“To address this, efforts are being made to recognize feedback from social media and other digital platforms as valid forms of public participation. Emails and formal submissions remain important, but incorporating WhatsApp and online discussions will ensure a broader, more inclusive engagement,” he added.

Kuria offered a structured walk-through of the budget-making process, anchored in the Public Finance Management (PFM) Act. He said the cycle begins with the Budget Circular by August 30, as per Section 35, and that “the formulation of the budget for the 2025–2026 financial year technically began in the previous year through the Budget Review and Outlook Paper (PROP), which is tabled by September 30 under Section 26 of the Act.”

This PROP assesses the economic performance of the past year while forecasting the year ahead.

By February 15, Kuria said, the government publishes the Budget Policy Statement (BPS), which sets expenditure ceilings for critical sectors such as education, health, and infrastructure. These are subject to public input through nationwide meetings, written feedback, and online engagements.

He added, “The next step, mandated by Article 2 of the Constitution, is the Division of Revenue Bill, which determines the allocation of funds between the national and county governments. This often leads to negotiations, as counties may request additional funds beyond the national government’s proposed allocation.”

The County Allocation of Revenue Bill (CARA) then distributes the funds among counties, factoring in population, poverty levels, health indicators, and revenue generation. Kuria said fiscal discipline is also being considered as a possible metric—though how to measure it remains a sticking point.

“By the same February 15 deadline, the Medium-Term Debt Management Strategy (MTRS) is also tabled, outlining debt sustainability and revenue projections. This document sets the framework for borrowing strategies, both domestically and externally, alongside expected revenue streams,” Kuria noted.

He emphasized that by April 30, budget estimates are released, detailing sector-specific allocations, including for basic education, junior secondary schools, healthcare, and roads.

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Public participation to begin earlier in the budget process

“Public participation remains a key component, with the Budget Committee mandated to conduct consultations in at least 12 counties annually. This ensures that within four budget cycles, every county has had an opportunity to provide input,” he said.

Kuria reaffirmed that “beyond physical meetings, public engagement through emails, media discussions, and online forums will continue to play an essential role in shaping budget priorities.” He said the goal is for resource allocation to reflect citizen needs while being transparent and efficient.

Looking ahead to April 30, the Finance Bill and budget estimates will be tabled in the National Assembly. Both will go through a first reading and public participation process.

“Kenyans are encouraged to attend these meetings to engage in the discussions,” he urged.

Social media and WhatsApp to be used for collecting public views

However, he acknowledged modern-day barriers: “Recognizing the limitations of in-person attendance due to technology and work commitments, the government will introduce additional communication channels. Beyond traditional emails and letters, WhatsApp numbers will be provided, and conversations on social media will be monitored to ensure broader participation.”

Citizens were also encouraged to go beyond general sentiments.

“Citizens are urged to familiarize themselves with the bill, identify specific clauses they find problematic, and propose improvements. The purpose of the legislation is not to burden anyone but rather to ease the cost of living, support local manufacturing, enhance efficiency, and ensure proper allocation of funds,” Kuria explained.

He further disclosed that the government has approved a shift from incremental to zero-based budgeting via a Cabinet paper.

“This approach requires budgeting to start from zero rather than relying on previous allocations. Expenses such as salaries, leave allowances, training costs, and transport will be factored into the new budget structure. The Budget Policy Statement and estimates will be formulated under this zero-based budgeting approach,” he said.

Additionally, changes to the PFM Act have brought about a shift from cash to accrual accounting. Kuria explained that “previously, government spending at the end of the financial year resembled a rush to absorb funds before closure. With accrual accounting, unpaid bills will roll over, requiring additional budgetary appropriations for expenses incurred.”

This, he said, would help address pending bills, promote prompt payments to suppliers, and improve liquidity while curbing fiscal mismanagement.

On the revenue side, Kuria said that parliament has increased the expenditure ceiling and that “the budget will be financed through three primary sources: existing tax measures, appropriations in aid, and donor funding.”

He added, “By the April 30 deadline, data on appropriations and donor commitments will be available to assess whether existing revenues suffice. If additional revenue is required, new tax measures will be introduced. However, if the available funds meet expenditure ceilings, there may be no need for a finance bill.”

Lastly, Kuria urged Kenyans to think beyond tax rejection.

“Public discourse on the budget should not be limited to rejecting new tax measures but should also involve identifying areas where expenditures can be cut. A constructive discussion on optimizing the budget will help ensure financial stability and economic progress,” he said.

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