How MPs tried to change law on taxes - Daily Nation

How MPs tried to change law on taxes

Saturday September 1 2018

Kenya National Assembly

The precincts of Parliament were last week a theatre of various competing interests converged for one thing: money. PHOTO | FILE | NATION MEDIA GROUP 

By IBRAHIM ORUKO
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The precincts of Parliament were last week a theatre of various competing interests converged for one thing: money.

National Treasury CS Henry Rotich and individuals representing various betting firms converged in the National Assembly to follow proceedings on the debate on the Finance Bill.

The Bill is an important tool in the Budget-making process. It usually comes at the tail end of the process, detailing revenue raising measures to finance the usual ambitious national budget read in June. The 2018/19 Budget stands at Sh3.04 trillion, the biggest in modern Kenya and the most ambitious since the country gained independence nearly 55 years ago.

DIFFERENT TACTICS

As such, there was no way Mr Rotich was going to sit back and hope that the money he needs to finance the Budget will fall like manna from heaven. He decided to camp in Parliament where he employed different tactics to ensure that the adoption of the Bill reflected to a large extent the objectives of the government, especially with regard to the Big Four agenda.

Mr Rotich personally lobbied the MPs and to some extent employed the services of Majority Leader Aden Duale and the chairman of Committee on Finance and Planning, Mr Joseph Limo, to ensure the Treasury had a greater say in the passage of the Bill.

COST OF LIVING

Mr Rotich’s visits became even more urgent when Minority Whip Junet Mohamed revealed on Tuesday his proposals to extend the window for the introduction of the 16 percent VAT on petroleum products. He wrote to the Speaker Justin Muturi, raising questions on the procedure used to process the amendment, and pleaded that it be withdrawn as it had not been debated with the committee on Finance.

Mr Muturi did not reply to the letter but when the Bill came for the committee of the whole House (third reading), he took the opportunity to inform the House of the Treasury’s misgivings but ruled that he had decided to let the House take a final position.

INAPPROPRIATE

Mr Mohamed argued that the introduction of the VAT on fuel heralds an era of inflation and increased the cost of living because fuel is the main driver of the Kenyan economy. He was supported by Mr John Mbadi and Gladys Wanga.

CS Rotich reached out to Mr Muturi, asking that the amendment be withdrawn. However, Parliament did not hand him his wish.

He also called Mr Limo, who in turn, told Mr Junet that the amendment was inappropriate because it had not been processed through the committee.

AMENDMENT

“Parliament has been accused of being insensitive to the plight of the public. Let’s suspend the introduction of this VAT so that we can engage the treasury on the best way out of this situation,” Mr Mohamed said.

While Mr Duale vowed to oppose the amendment, he was a no show when it finally reached the floor of the House.

Homa Bay Woman Rep Gladys Wanga dug in, describing the proposal to suspend as the “most important amendment of the day” because “we add the taxes we shall harm Kenya greatly”.

Minority leader John Mbadi, while supporting the amendment, criticised the IMF for forcing the proposals down the throats of the Kenyan people and challenged the government to explore alternative revenues measures to fund the Budget.

REDUCTION

“We can’t rob the poor to fund the Budget. We must make a decision and do away with this VAT on fuel," he said.

On the other end of the lobby, the betting firms representatives sat pensively, like men whose wives had been wheeled into the labour ward. The Finance Bill had proposed the reduction of the excise tax payable by betting companies to 15 per cent from 35 per cent while the winners of lotteries were to be charged 20 per cent on their earnings. Much as the betting firms had pushed for the amendment, they were dejected when the MPs rejected the amendment.

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