Uhuru wins as MPs endorse tax proposal - Daily Nation

MPs adopt Uhuru memo, stage set for Sh130b in taxes

Thursday September 20 2018

MPs on finance bill

Turkana South MP James Lomenen addresses the media outside Parliament buildings on September 20, 2018 following debate on supplementary budget estimates and Finace Bill, 2018. PHOTO | JEFF ANGOTE |NATION MEDIA GROUP 

By DAVID MWERE
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By SAMWEL OWINO
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By IBRAHIM ORUKO
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IConfusion marred debate on the president's reservations on Finance Bill, 2018, after MPs expressed sharp disagreement with the manner in which the vote on the introduction of the fuel tax was conducted.

The House adopted the reservations during a chaotic sitting on Thursday, characterised by boos and jeers and bearing similarities to the enactment of Security Laws (Amendments) Bill, 2015.

REVENUE CHANNELS

With the victory, the executive has the power to raise up to Sh130 billion through taxes including the eight percent levy on fuel products, that will see about 17.5 billion realised.

Sugar confectioneries will bring in about Sh475 million, money transfers Sh11.4 billion, betting companies and winners Sh30 billion, the housing fund 10 billion and kerosene Sh9.8 billion.

The memorandum proposed a deletion of the 0.05 percent 'Robin Hood' tax which had been proposed on money transfers of at least Sh500, 000.

The government plans to recoup the lost revenue through the 20 percent imposed on the charges banks levy customers in money transfers, meaning that the transfer charges could still go up.  

There is also a new proposal to increase the price of kerosene by Sh18 per liter to check adulteration of fuel as well as split the current 35 percent tax on betting companies to include the winners.

The target in this case is to raise Sh9.8 billion. This will see betting companies charged 15 percent, on top of the 30 percent charged in terms of corporate income, and winners 20 percent.

TROUBLE

MPs arrived in the morning for the sitting. It was specially created to allow them to discuss the supplementary budget estimates and the reservations on the bill.

From the onset, it had been clear that the lawmakers were opposed to the president’s reservations.

The first sign that trouble lay ahead emerged when Kiminini MP Chris Wamalwa stood on a point of order and sought to amend the Order Paper to reorganise the business of the day.

In his presentation, Mr Wamalwa said he wanted the president’s reservations debated ahead before the budget estimates. Speaker Justin Muturi remained adamant and informed the House that the paper was cast in stone.

The MPs easily approved the financial estimates, saying they had no problem with the decision by the executive to reorganise allocations due to various departments and ministries.

In the estimates, the Treasury slashed Sh3.026 trillion budget for the current financial year by Sh37.6 million.

The approval of the budget gives the government legal backing to spend the re-organised budget once it is signed into law by the president.

'ZERO'

The moment the Speaker exited the House and Ms Soipan Tuya took over to steer the business in the committee of the whole House, the MPs started chanting “zero”, in reference to their wish for petroleum products to be zero-rated.

The chants were more pronounced on the left of the Speaker, seats usually occupied by the minority Nasa coalition, where Ruaraka MP TJ Kajwang proved an effective leader.

On the right of the Speaker, Jubilee Party MPs seemed equally unhappy with the presidents recommendations but expressed themselves differently.

Jubilee Secretary General Raphael Tuju arrived earlier and was later joined by the party’s vice chairman David Murathe.

A majority of MPs walked out in protest and the unending jeers prompted the speaker to return to the house.

After listening to five members from both sides, Mr Muturi ruled that a second vote would take place as there was a dispute on the number of members in the House.

He then called a 15-minute break but when the House resumed, the speaker had changed his mind. He ended up upholding the halving of the 16 percent Value Added Tax on petroleum products as proposed by the president.

Quoting from the Hansard, he upheld the decision that indicated that the House had adopted the president’s memo on the fuel levy, attracting more chants and boos.

Boos, jeers and renditions of bado mapambano (the struggle continues) enveloped a House united for the first time in a long time as MPs continuously chanted “zero”.

Minority Leader John Mbadi, while supporting the memorandum, had said that in the bill taken to the president for assent, there was no proposal for zero rating of petroleum products.

He was jeered by his colleagues who shouted 'zero' and forced to cut short his remarks.

NO SMOOTH SAILING

There was no smooth sailing for the executive as MPs were left accusing the Speaker of rigging the vote, saying it had been clear that the opponents would win.

At one point, an enraged House had shouted down Speaker Muturi and Clerk Michael Sialai, accusing them of being part of a wider scheme to rob them of victory and introduce the tax through the back door.

MPs Kajwang, Vincent Tuwei, Mohammed Ali, Makali Mulu and Millie Odhiambo had raised objections on the decision by Ms Tuya that gave victory to the 'yes' voters, and through chants and boos forced the Speaker back to the floor.

Duale was captured seemingly de-whipping members from the House to deny the House the requisite two thirds majority that would have seen the memo thrown out.

After the vote, Mr Duale confirmed having forced some MPs from the chambers, saying that as majority leader, his plot was to ensure the government agenda was achieved.

On Wednesday, the majority leader said that while MPs want to stand with the public on the VAT, there is need to raise money for development and other government projects.

PARTY DECISIONS

After the House adjourned, MPs opposed to the memo cried foul, arguing that tthe executive had rigged the vote in collusion with the House leadership.

Speaking to journalists after the adjournment, Laikipia Woman Representative Catherine Waruguru described the vote as a show of dictatorship.

“Mr President, stamp your authority and don’t be swayed by cheap politics around Parliament,” she said, surrounded by colleagues who said they would fight on.

Legislators who talked to the Nation but did not want to be named said they cannot go against the decisions of their party leaders.

“People listen to Raila Odinga more than they do me. He can explain what happened later. I cannot, so let me just support the president’s memorandum,” said a first term opposition MP.

Most got caught between fulfilling the wishes of their leaders and those of the electorate.