Blow to President Kenyatta as MPs Throw Out His Proposed Budget

Treasury CS Ukur Yatani

The proposals on taxation were tabled by Treasury Cabinet Secretary, Ukur Yattani, and were intended to finance President Uhuru Kenyatta’s exit budget

By The Weekly Vision

Kenya President Uhuru Kenyatta walks into his retirement in two months seemingly bitter and frustrated after Members of Parliament voted to reject his proposed tax increases on food items. The latest move by MPs comes a few months after the president suffered heavy losses in the Corridors of Justice where his retirement pet project, the BBI was thrice ruled unconstitutional.

The BBI PROJECT was widely seen by many as an attempt by the president to re-invent himself Putin-style, as he is now chairman of the Azmio political coalition whose presidential flag bearer is Raila Amolo Odinga. The defiant judges not only trashed the bill but warned the president that he could in the future face court charges concerning the ill-fated project.

President Kenyatta with the initial BBI report

Now even in parliament, the retiring president has been denied his final budget! Members of Parliament dominated by the Uhuru-Raila alliance resolved to put the interests of the common man first aware of the pending election in August. The MPs had little choice but to reject proposals by the National Treasury to introduce VAT on basic food commodities such as maize and wheat flour, which would have over-burdened the already burdened middle and low-income earners battling the current high cost of living. In the Finance Bill 2022 tabled before parliament by the Finance and National Planning Committee led by Homa Bay Woman Representative, Gladys Wanga, it was noted that Kenyans were struggling to make ends meet and the tax proposals would be an unnecessary burden.

Additionally, the committee rejected the VAT that was to be imposed on cassava which is used as an alternative to maize in some regions of the country. The proposals were tabled by Treasury Cabinet Secretary, Ukur Yatani, and were intended to finance President Uhuru Kenyatta’s exit budget. “The committee observed that the amendment will increase the price of maize flour, cassava, and wheat flour. The committee recommends the deletion of the proposal as contained in the Finance Bill 2022,” read the parliamentary committee’s report in part.

The Wanga-led committee also proposed the reduction of VAT on Liquefied Petroleum Gas (LPG) from 16 per cent to 8 per cent. Regarding the importation of motorcycles, the committee opposed proposals by the Treasury to increase the exercise duly noting that the sector was offering employment to many Kenyans. It further noted that boosting the sector and other business ventures would help the government attain some of its tax targets. It also threw out a proposal to have businesses and individuals with tax disputes pay half of the contested taxes before appealing to court.

“The committee observed that the requirement to deposit 50 per cent of the disputed amount before filing an appeal in the High Court will reduce working capital for businesses and also deny justice to taxpayers where they are unable to raise the amount. The committee, therefore, recommends that the clause be deleted.”

Members of Parliament are expected to debate the recommendations made by the Wanga-led committee before approving the final Bill. The inflation rate has adversely affected the living standards of most Kenyans compelling them to pay more to put food on the table with many now only able to eat a square meal once. Others go for days without food. In the famine-stricken region of Tana River where drought has killed livestock and destroyed crops, infants have died of hunger as the crisis spirals of proportion.

The move by the Finance Committee to reject the additional taxes will cushion Kenyans from the rising cost of living but will deny the Exchequer much-needed revenue to bankroll one of Africa’s most expensive general elections and pay pensions to a host of leaders including President Kenyatta already a wealthy man from the family fortune.

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