In Summary
Deputy President William Ruto was yesterday
coy about the adverse implication of the increased fuel price on
Kenyans, vaguely saying the Executive would work with Parliament to
resolve the crisis that is expected to degenerate in the coming weeks
after motorists and workers threatened to down tools.
Mr
Ruto, while reacting to the effects of the new law — VAT Act of 2013 —
starting September 1 this year, issued a statement saying a balance
would be created so as not to burden Kenyans. The law has increased the
prices of fuel products in the country.
Mr
Ruto spoke on the day Nasa leader Musalia Mudavadi and a section of the
coalition’s MPs gave the government three days to remedy the already
dire situation or they would mobilise Kenyans to protest the increase in
fuel prices.
Nasa MPs Anthony
Oluoch (Mathare), Mark Nyamita (Uriri) and Caleb Amisi (Saboti), who
spoke after a church service in Mathare, Nairobi, also threatened to
move "Removal from office" proceedings against National Treasury Cabinet
Secretary Henry Rotich if he fails to suspend the law.
RAISED CONCERN
Baringo
Senator Gideon Moi also raised concern over the hefty tax, saying it
would push the cost of living higher in an already harsh economy.
“Though the government needs the money to fund development projects, the
ripple effect of the tax is far and wide — including high cost of
living, rising inflation, loss of jobs and slow growth of the economy,”
said Senator Moi in a statement to newsrooms.
Mr Moi, who is also the Kanu chairman, added:
“It is prudent for the government and all other relevant agencies to
explore other ways of raising revenue other than implementing this tax”.
He
said the fuel tax will condemn the majority of Kenyans to poverty as
they will be have to dig deeper into their pockets to buy basic goods.
Kenya
Association of Manufacturers head of policy, research and advocacy Job
Wanjohi also opposed the VAT law, saying it would unnecessarily increase
the cost of doing business, thereby affecting the country’s balance of
trade with its partners.
On Thursday, the National
Assembly passed the Finance Bill 2018 that essentially delayed until
2020 the implementation of the "punitive law", which nonetheless came
into force on September 1.
PUBLIC OUTCRY
The law was to take effect in 2013 but, owing to sustained public outcry, it was deferred to 2016 and then to 2018.
But
the move by Mr Rotich to direct Kenya Revenue Authority (KRA) and
Energy Regulatory Commission (ERC) to effect the law that saw fuel
prices shoot up on September 1, 2018, has angered the majority of poor
Kenyans.
“The Executive will be meeting Parliament to
address the concerns raised. A solution will be reached,” Mr Ruto said,
adding that the intended solution will not slam the brakes on the
government’s multibillion development plans.
The DP spoke on Sunday during a prayer service at Good Shepherd Catholic Church in North Horr, Marsabit County.
National
Assembly Leader of Majority Aden Duale said that unless the President
signs the Finance Bill, the 2013 law shall apply. “The horse has already
bolted. Kenyans have no choice but to pay VAT on petroleum products.
They can only appeal to the President to sign the Finance Bill into
law,” Mr Duale said.
IMPACT NEGATIVELY
President
Uhuru Kenyatta is currently on a state visit to China. Kenyans are
looking up to the leadership of the country to mitigate the situation,
which they fear will impact negatively on Jubilee's Big Four agenda.
Until a solution is found, Kenyans will have to pay through their noses
to fund the ambitious Sh3.074 trillion budget.
Even as
Mr Ruto spoke, Mr Mudavadi told President Kenyatta that there were no
two ways about respecting the decision of the National Assembly and
signing into law the Finance Bill.
“Application of this
"punitive law" depicts a government that has gone rogue. Despite
warnings against reckless borrowing since 2013, the government has
played deaf and sunk the country into a Sh5.1 trillion debt, whose use
is shrouded in secrecy and whose impact is glamorous projects with no
immediate comfort to Kenyans,” Mr Mudavadi said.
The
Nasa leader said imposition of the VAT law on petroleum products is a
lazy recourse to a law that has been suspended twice. He said the
Treasury relied on the rollover of the 2013 law rather than on a
reasoned and justified imposition of VAT based on the current economic
status of the country.
PLAYING HOAX
“Treasury
has, therefore, no justifiable economic reason for the increase, other
than playing hoax after being bullied by multinational banks,” he said,
adding “at no time should the government be dictated by a wrong sense of
entitlement.”
According to Mr Mudavadi, Mr Kenyatta
should urgently save the country from turmoil: “This magnanimous act
will arrest the growing disaffection with the government’s appetite to
fleece Kenyans through frivolous taxes.” The indebtedness that the
Jubilee government has sunk the country into is alarming, with every
living Kenyan owing donors about Sh120,000. This comes as pilferage of
public resources continues. Just recently, the cost of electricity also
increased considerably.
Mr Oluoch said he would marshal
MPs to begin the process of removing Mr Rotich from office if the
situation continues. “People are already overburdened and we cannot
afford to levy them more. Parliament has already spoken on this. Why Mr
Rotich is not listening, I do not know. If he doesn’t listen to the
voice of the representatives of the people, we are coming for you,” Mr
Oluoch said. He added: “You can’t look for money without us (MPs) giving
you the legal instruments to collect it.”
HIGH COST OF PRODUCTION
Mr
Nyamita added; “You can’t succeed when the cost of production is
already too high. If the situation stands, the Big Four Agenda will
remain a pipe dream.”
“I will table a Motion in
Parliament to impeach Mr Rotich for his blatant failure to implement the
recommendations of the House, which reversed the planned increase of
fuel prices,” Matungulu MP Stephen Mule said yesterday at St Mary’s
Catholic Church in Tala, Machakos.
Mr Mudavadi said the
government stands condemned for its anti-poor economic policies that
have resulted in Kenyans’ indebtedness and high cost of living — pushing
the poor into extreme poverty. “Mr President, burdensome taxes
translate into intransigence and impunity by the government. Your fiscal
policies are killing the goose that lays the golden egg,” said the Nasa
leader. He said many Kenyans are living at the mercy of shylocks and
banks, with many small businesses facing closure due to a stagnant
economy.
Additional reporting by Wycliff Kipsang
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