Finance Bill vote poses biggest test to Raila, Uhuru deal

President Uhuru Kenyatta and Deputy President William Ruto during the Jubilee Parliamentary Group Meeting at State House, Nairobi, on September 18, 2018. PHOTO | PSCU

What you need to know:

  • At State House, President Kenyatta chaired a Jubilee Parliamentary Group said to have been characterised by “heated debate.”
  • MPs demanded that the government stop wastage of public funds, fight corruption and begin tax and banking reforms to net tax defaulters.
  • At State House, President Kenyatta chaired a Jubilee Parliamentary Group said to have been characterised by “heated debate.”

President Uhuru Kenyatta and opposition leader Raila Odinga will on Thursday face the biggest test of their handshake deal when the National Assembly votes on the Head of State’s memorandum on the Finance Bill he rejected last week.

Even after sitting with the two party leaders for hours to deliberate on the President’s proposals, top among them being the eight per cent value added tax on petroleum products, MPs from both sides were bullish that they will still veto President Kenyatta's proposals. MPs need to gather 233 majority to block the proposals.

“This is a House of debate and everybody will be led according to their conscience. We know how we will vote. We know what our people want,” Ruaraka MP TJ Kajwang’ said.

National Super Alliance (Nasa) MPs met Mr Odinga at Orange House where they resolved to offer conditional support for the eight per cent tax, saying they will only back it for a year after which they will review it.

STOP WASTAGE

They demanded that the government stop wastage of public funds, fight corruption and begin tax and banking reforms to net tax defaulters.

“All public expenditure should be economical and be sensitive about the harsh financial times. We don’t want to hear of people travelling first class on public funds because of “medical conditions,” House minority whip Junet Mohamed said in a joint statement he read on behalf of the MPs drawn from ODM, Kalonzo Musyoka's Wiper and Moses Wetang’ula's Ford-Kenya.

“We must now make a genuine attempt at eliminating waste in government. There are too many purchases that are wasteful because they are unnecessary, or duplicative and often simply egoistic,” said Mr Mohamed.

At State House, President Kenyatta chaired a Jubilee Parliamentary Group said to have been characterised by “heated debate.”

EXCISE DUTY

But while National Assembly Majority Leader Aden Duale said 181 MPs had attended the meeting, sources told the Nation that they were fewer. Pictures of the meeting provided by State House did not show a group photo as is usually the case.

Despite the House slapping a 35 per cent tax on betting companies, President Kenyatta has in his memorandum asked MPs to reduce it to 15 per cent and slap a 15 per cent levy on the winners.

The President also wants a 15 per cent excise duty levied on telephone and Internet data services — a charge that is going to affect a majority of people in a country with an impressive mobile penetration rate and trillions of shillings transacted in mobile transactions annually.

Those earning Sh100,000 or more will have to contribute 1.5 per cent of their earnings to a housing levy to help the Government achieve the goal of providing 500,000 affordable houses.

MANAGE FUND

The MPs had opposed the proposal saying there are no legal provisions on who will manage the fund.

If passed, the employer will now have to ensure that the contributions are remitted to the National Housing Development Fund “before the ninth day of the following month.”

A penalty of five per cent has been proposed for employers who fail to remit the monies on the due date.

President Kenyatta also wants an excise duty levied on sugar confectionery although the House had voted to zero-rate it. He also wants 0.05 per cent levy on money transfer services exceeding Sh500, 000. MPs had voted to throw away this proposal in the bill.

In its amendments, Kipkelion East MP Joseph Limo-led Finance and National Planning Committee sought to exempt transfers between individual accounts from the levy.

The President also wants an anti-adulteration levy of Sh18 per litre of the customs value paid on all illuminating kerosene imported into the country for home use.

Even after MPs said they will approve the President’s memorandum, a list circulating in Parliament indicated that most will shoot it down.

MUCH TAXATION

“We have the future of this country to take care of. We shall not accept to burden the people with too much taxation whose effects cannot be replicated on the ground,” Dagoretti North MP Simba Arati said.

On the ODM stand, Wajir West MP Mohamed Kolosh said: “That was a party position, I will take a decision that favours the people on the floor of the House.”

MPs Mohammed Ali (Nyali), Alfred Agoi (Sabatia), Charles Kilonzo (Yatta), Zadock Ogutu (Bomachoge Borabu) and Didimus Baraza (Kimilili) spoke out against backing a common position, saying they will use individual discretion during voting.

“Parliament represents the interests of the people. We will defy the position of the party leaders. The President cannot dictate how Parliament votes,” Mr Barasa said.

Before getting down to look at the President’s memorandum and write a report to be debated tomorrow, the Finance Committee is expected to consider the issues raised by Mathare MP Anthony Tom Oluoch on the President’s memorandum.

SEPARATION OF POWERS

Mr Oluoch wants directions on whether failure by Parliament to raise the two-thirds threshold required will result in the President’s reservations becoming law, a situation he says will make the Head of State a legislator contrary to the doctrine of separation of powers.

The MP also wants to know whether the reservations of the President, which have not been subjected to public participation in terms of Standing Order 127, can stand the test of law and whether the proposals touching on specific parts of the Finance Bill, and not the entire Bill, are constitutional.

Reported by David Mwere, Patrick Lang’at, and Samwel Owino