MPs scheme to shoot down Uhuru’s austerity proposals

Sunday September 16 2018

MPs

MPs Caleb Amisi Luyai (Saboti), Anthony Oluoch (Mathare) and Mark Nyamita (Uriri) address the media in Nairobi last Sunday. Mr Amisi is collecting signatures to shoot down proposals by the President. PHOTO | DENNIS ONSONGO| NATION MEDIA GROUP 

IBRAHIM ORUKO
By IBRAHIM ORUKO
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WANJOHI GITHAE
By WANJOHI GITHAE
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MPs opposed to the proposed changes on the fuel tax and austerity measures announced by President Uhuru Kenyatta on Friday held meetings to defeat the plan on Saturday.

The lawmakers from across the political divide, who spoke to the Nation, were united in their opposition to reducing the fuel tax and introducing measures to save money.

They vowed to shoot the proposals down when the 2018 Finance Bill is returned to the National Assembly on Thursday.

Mr Kenyatta bowed to pressure and reduced the tax from 16 to eight per cent.

He, however, proposed cuts targeting Parliament, devolved governments and the National Government Constituency Development Fund while urging Kenyans to tighten their belts.

The ambitious Sh3.04 trillion budget largely defines the President’s Big Four Agenda.

DISCUSS MEMO

The ruling Jubilee party has scheduled a parliamentary group meeting for Tuesday where it is expected to whip MPs into supporting Mr Kenyatta’s proposals.

National Assembly Majority Leader Aden Duale said the party would hold the meeting at State House to discuss the memo on the bill.

The meeting would only involve members of the National Assembly, a sign that the President is taking seriously his proposals.

“We shall definitely discuss the reduction of fuel prices as announced by the President, the agenda of the House and other legislations coming for debate,” Mr Duale said, referring to the Health Laws (amendment) Bill and the supplementary estimates for the 2018/19 financial year.

He denied that the NGCDF kitty had been affected by the austerity measures but urged the public to be wait for the supplementary appropriation estimates he will table in the House.

It is not clear if the opposition will convene a parliamentary group meeting to review the President’s memorandum.

ODM SPLIT

The Orange Democratic Movement is already split on the issue. Jubilee has not had a parliamentary group meeting since February.

It will not be easy to make the lawmakers speak with one voice, however, as the Nation has learnt that many are prepared to express their displeasure on the floor.

Some are mobilising to get the necessary threshold required to veto the President’s memorandum once it is taken to the House.

The lawmakers are particularly angered by the President’s decision to countermand their proposal to defer the introduction of Value Added Tax on petroleum products by another two years.

They want him to focus on sealing corruption loopholes in the public service, address wastage and pressure the Kenya Revenue Authority to meet its targets.

Saboti MP Caleb Amisi was asked to mobilise MPs and ensure maximum attendance on Thursday to shoot down the President’s proposals.

AMEND FINANCE BILL

Such an eventuality would mean the amended Finance Bill as passed by the House on August 30 automatically passes.

“Any serious MP must reject the attempt by the President to legislate through the backdoor. We cannot let Kenyans suffer. President Kenyatta’s action should be rejected,” Mr Amisi told Nation on Saturday.

The Saboti MP was moving around collecting signatures of lawmakers determined to reject the memorandum.

He has also set up a WhatsApp group where the converts are added and air their views. Some MPs travelling abroad on official duties are said to have promised to fly back home before Tuesday.

The lawmakers have vowed to maintain their stand on tax when they meet to discuss the proposal by the government.

“We are mobilising members for maximum attendance. We want the 349 MPs to fill the seats and reject the President’s schemes,” Mr Amisi said.

“Those who will not come will be deemed to be collaborators with those who are making life hard for Kenyans. We will expose them on Tuesday morning.”

INCREASING TAX ON ALCOHOL

The first term MP argued that the President should consider increasing tax on alcohol and cigarettes but steer clear of VAT “because it hurts the public”.

In his speech to the nation, President Kenyatta said the 2018 Finance Bill protected the status quo and sacrificed the country’s bigger vision.

He added that in enacting the bill, the lawmakers had taken the easier path instead of rising to the challenge of the time.

Mr Kenyatta went on to propose that the National Assembly reduces by half the tax on petroleum products, the shareable revenue to counties slashed by Sh9 billion and Sh3.8 billion taken from the Equalisation Fund.

Parliament’s budget would be slashed by Sh5 billion while Sh8.7 billion will be taken from the National Government Constituency Development Fund.

The lawmakers’ anger stems from the fact that the austerity measures announced by Mr Kenyatta target other arms of the government except the Executive, which they accuse of corruption and massive wastage.

EXAGGERATED FIGURES

They also argue that 40 per cent of the projected revenue is never collected and insist that pressure should be piled on KRA to streamline its systems.

Treasury’s Sh3.07 trillion spending plans delivered to the National Assembly in June allocated Sh653 billion to the national government’s development expenditure.

Counties were allocated Sh372 billion, of which approximately 30 per cent will likely go towards development. This means approximately Sh760 billion of the total will be used for development.

Finance experts have argued that the 2018/19 budget contains lines of frivolous expenditure, exaggerated figures and repeated items that will guzzle billions of shillings, pointing out that some allocations contain higher spending than the actual estimates.

While Minority Leader John Mbadi says the opposition would  hold a parliamentary group forum on Tuesday, Minority Whip Junet Mohammed appeared to differ.

“That is not final. We will first have to look at the memorandum before we take any decision,” Mr Mohammed said.

The opposition to the proposals also came from Jubilee, with Murang’a Woman Representative Sabina Chege saying the measures announced by the President are not good for the country as they will deny Kenyans projects and increase the cost of living.

REDUCING WASTAGE

She said more emphasis should be on reducing wastage and reclaiming stolen money from the corrupt.

“Even if the President proposed to reduce tax to one per cent, traders will still take advantage and increase prices. This country has a lot of money and it would be wise if the President concentrated on recovering corruption proceeds and sealing loopholes,” she said.

Nominated MP Godfrey Osotsi (Amani National Congress) faulted the austerity measures and said the President ought to have cut wastage in government spending and spared the public “the vagaries of VAT on fuel”.

Kirinyaga Woman Representative Purity Ngirici was diplomatic. “It is important for us to critically assess what we need to do so that the government does not go down and mwananchi does not feel unduly squeezed,” she said.

Soy MP Caleb Kositany said he would oppose any measures that would reduce the NGCDF and instead called for a reduction of the Big Four Agenda budgets.

His Matungu counterpart Justus Murunga said the high cost of living is a result of government borrowing.

SERVICE DEBTS

He added that the process of getting the debts was not consultative.

“We will remain firm and ensure the government does not tax Kenyans to service debts they are not responsible for,” Mr Murunga said.

“We will say no more increase on the fuel tax because this will affect overburdened poor Kenyans who are grappling with the high cost of living.”

For his part, Ikolomani MP Benard Shinali said lawmakers would be required to go through the proposals by the President to see if they contain valid reasons before they make up their mind.

“If we agree with the President, we will ratify the bill. If not, our intention was to stop the increase on petroleum prices until 2020,” he said.

Rarieda MP Otiende Amollo (ODM) urged every lawmaker “to stand out and be counted” by rejecting the President’s memorandum.

LOW COST HOUSING

The showdown between the Legislature and the Executive was not entirely unexpected, especially after lawmakers ganged up during the third reading of the debate of the 2018 Finance Bill to shoot down major revenue raising proposals contained in the National Treasury Cabinet Secretary Henry Rotich’s budget speech in June.

The MPs rejected a proposal to introduce the National Housing Development Fund, which would have seen the State raise money to build low cost housing units as part of the Big Four Agenda.

They also rejected the proposal to have the Robin Hood tax to levy tax on bank money transfers to any amount exceeding Sh500,000, arguing that the minister’s proposal would not achieve its intended  objectives.

The MPs rejected the proposal to reduce taxes on betting companies from 35 to 15 per cent and have winners of lotteries levied 20 per cent of their earnings.

Additional reporting by Shaban Makokha and David Mwere