By Calvin Shikuku 

President William Ruto signed the Finance Bill 2023 into law on Monday, following its approval by parliament. Despite facing controversy and opposition from some lawmakers and the public, the bill was passed. However, the measures proposed in the bill, aimed at increasing government taxes, are seen as punitive in both the short and long term and are expected to cause significant suffering to young women and girls. This raises concerns about potential setbacks in Kenya’s progress on Sexual and Reproductive Health and Rights (SRHR) due to the passing of this bill.

One of the key issues contested in parliament was the increase in turn over tax (TOT) on Micro, Small, and Medium Enterprises (MSMEs). The bill aims to expand the TOT base by targeting individuals with turnovers between KES 500,000 and KES 1 million, who were previously exempted. Similarly, the proposed increase in Value Added Tax (VAT) on petroleum products from the current 8% to 16% could potentially have indirect negative effects on SRHR.

MSMEs play a critical role in providing SRHR services to impoverished communities, and they also have a significant presence in the informal sector, where many employees lack access to formal employment benefits such as health insurance. An increase in turn over tax could lead to reduced access to affordable healthcare services, including those related to SRHR.

Moreover, high turn over tax and increased VAT on petroleum products can raise the overall cost of doing business for MSMEs. This may result in financial difficulties, leading to reduced employment opportunities and lower incomes, indirectly affecting individuals’ access to healthcare services.

The new law will also impact healthcare infrastructure, as MSMEs may face financial challenges due to limited resources available for investment in employee benefits, including healthcare.

It is important to note that gender parity remains a challenge in Kenya. The new law is likely to widen inequality, particularly in the workplace. Increased financial burdens on MSMEs could lead to reduced employment opportunities for women, thereby affecting their economic empowerment and access to SRHR services.

“Economic status, especially in informal settlements, has always been a major barrier to accessing SRHR services,” says Floice, a safety and well-being ambassador under the Safe and Inclusive Cities Project. She further highlights an increase in teenage pregnancy cases since the beginning of the COVID-19 pandemic. “I am afraid that the tough economy will lead to a high rate of transactional sex, a major driver of teenage pregnancies and STIs, including HIV and AIDS,” she adds.

However, it’s worth noting that the same bill has been seen to target foreign investments, particularly in the health sector. The new law introduces exemptions for diagnostic and laboratory reagents, vaccines for humans, and veterinary medicine, which indicates a positive aspect within the bill.

President William Ruto signed the Finance Bill 2023 into law on Monday, following its approval by parliament. Despite facing controversy and opposition from some lawmakers and the public, the bill was passed. However, the measures proposed in the bill, aimed at increasing government taxes, are seen as punitive in both the short and long term and are expected to cause significant suffering to young women and girls. This raises concerns about potential setbacks in Kenya’s progress on Sexual and Reproductive Health and Rights (SRHR) due to the passing of this bill.

One of the key issues contested in parliament was the increase in Turn Over Tax (TOT) on Micro, Small, and Medium Enterprises (MSMEs). The bill aims to expand the TOT base by targeting individuals with turnovers between KES 500,000 and KES 1 million, who were previously exempted. Similarly, the proposed increase in Value Added Tax (VAT) on petroleum products from the current 8% to 16% could potentially have indirect negative effects on SRHR.

MSMEs play a critical role in providing SRHR services to impoverished communities, and they also have a significant presence in the informal sector, where many employees lack access to formal employment benefits such as health insurance. An increase in TOT could lead to reduced access to affordable healthcare services, including those related to SRHR.

Moreover, high turn over tax and increased VAT on petroleum products can raise the overall cost of doing business for MSMEs. This may result in financial difficulties, leading to reduced employment opportunities and lower incomes, indirectly affecting individuals’ access to healthcare services.

The new law will also impact healthcare infrastructure, as MSMEs may face financial challenges due to limited resources available for investment in employee benefits, including healthcare.

It is important to note that gender parity remains a challenge in Kenya. The new law is likely to widen inequality, particularly in the workplace. Increased financial burdens on MSMEs could lead to reduced employment opportunities for women, thereby affecting their economic empowerment and access to SRHR services.

“Economic status, especially in informal settlements, has always been a major barrier to accessing SRHR services,” says Floice, a safety and well-being ambassador under the Safe and Inclusive Cities Project. She further highlights an increase in teenage pregnancy cases since the beginning of the COVID-19 pandemic. “I am afraid that the tough economy will lead to a high rate of transactional sex, a major driver of teenage pregnancies and STIs, including HIV and AIDS,” she adds.

However, it’s worth noting that the same bill has been seen to target foreign investments, particularly in the health sector. The new law introduces exemptions for diagnostic and laboratory reagents, vaccines for humans, and veterinary medicine, which indicates a positive aspect within the bill.

Calvin Shikuku is a youth Advocate at NAYA Kenya