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Spending plan is too ambitious, say MPs

Friday June 15 2018

Budget 2018

National Assembly Majority Leader Aden Duale (right) and Kikuyu MP Kimani Ichung'wah (left) usher National Treasury Cabinet Secretary Henry Rotich to Parliament on June 14, 2018. Mr Duale is among MPs who criticised the 2018/2019 budget as not being pro-poor. PHOTO | JEFF ANGOTE | NATION MEDIA GROUP 

IBRAHIM ORUKO
By IBRAHIM ORUKO
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JACQUELINE KUBANIA
By JACQUELINE KUBANIA
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Some MPs have questioned the practicality of implementation of this year's budget, arguing it is too ambitious.

A majority of the MPs who spoke to Nation expressed concern over the huge public debt, failure by Treasury Cabinet Secretary Henry Rotich to provide clarity on financing the Big Four agenda, and the proposed taxation measures, which they said would make life difficult for the ordinary mwananchi.

National Assembly Majority Leader Aden Duale criticised the proposal to increase excise duty on mobile money transfer services from 10 per cent to 12 per cent, the increase of tax on kerosene and the introduction of a Robin Hood Tax of 0.05 per cent on any amounts of Sh500,000 or more transferred through banks and other financial institutions.

NOT PRO-POOR

“This is not a pro-poor budget. The heavy taxation will hurt the common person and act as dis-incentive to those who want to start small scale businesses,” Mr Duale said.

He said the public debt had soared to unsustainable levels and expressed displeasure with the CS for having failed to explain to the House how he intends to finance the budget.

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CRAZY IDEA

National Assembly Minority Leader John Mbadi described the Robin Hood tax as a ‘crazy idea’ and questioned the proposal by the CS to amend the law capping interest rates.

“In my opinion, the law has achieved its intended purpose. The rates have stabilised and amending the law will make the banks run amok and destabilise the market as was the case before.”

Mr Mbadi also questioned the taxation measures proposed by the CS, saying they are inadequate in financing the budget.

INCREASED SPENDING

At the same time, experts have raised eyebrows over the budget, questioning increased government spending that has continued to dig the country into a deeper debt hole.

They feel the budget ignored the country’s current economic realities in favour of completing ambitious development projects while continuing to push the country deeper in debts.

“Since the government has already committed to funding these projects, it cannot abandon them without creating more waste,” said Mr John Kinuthia, an analyst at the International Budget Partnership.

He expressed concern over the fact that the CS did not mention any austerity measures, in-stead opting to increase taxation to plug budget deficits.