Explainer: Reasons the Finance Bill is tabled annually

 

Treasury CS Njuguna Ndung'u

The finance bill has dominated discussions for over a fortnight, shedding light on the power and reach of digital platforms.

While many are now familiar with its contents, understanding why it is tabled annually remains a challenge. Here are some key reasons:

1. Budget Planning: The government's fiscal year starts in June, marking the period for budgeting. The finance bill serves as a legislative tool to raise revenue through taxes and fees, funding the government's outlined spending plans in the national budget.

2. Tax Policy Adjustments: It allows the government to propose changes to existing tax laws and introduce new ones to adapt to evolving economic conditions and governmental priorities. This includes adjustments to income tax rates, Value Added Tax (VAT), excise duties, and potentially introducing new taxes.

3. Transparency and Public Participation: The bill mandates transparency in revenue-raising plans, offering opportunities for public scrutiny and feedback on proposed tax measures. This ensures accountability in the government's fiscal policies.

4. Legislative Streamlining: By tabling the finance bill annually, the need for multiple separate bills throughout the year is avoided, streamlining the legislative process. This annual bill facilitates the efficient proposal and enactment of tax changes.

BY GARVIN PATRICK