Week of reckoning as MPs decide whether to back Uhuru VAT proposal

Members of the National assembly at Parliament./File
Members of the National assembly at Parliament./File

The stage is set for a tug of war between President Uhuru Kenyatta and MPs over budget cuts. The MPs are at a crossroads on whether to stand with Kenyans and push no tax on petroleum products or back the President’s position.

Last Friday, Uhuru rejected the Finance Bill 2018 and instead returned it to Parliament with a memorandum proposing the House cut VAT on petroleum products from 16 per cent to eight per cent.

MPs had passed the the Bill with amendments in which they called for suspension of the implementation of the 16 per cent VAT on fuel for another two years.

Read:

However, National Treasury CS Henry Rotch went ahead to implement the law, which was technically coming into effect on September 1, a move which caused a huge public outcry.

Jubilee has the majority of MPs in the House and the public will have to wait and see which side this numerical strength will take.

Today, the President is expected to meet the MPs at State House to lobby them to support his tax cut and proposed austerity measures.

NASA has already openly rejected any taxation on fuel products, setting the stage for a confrontation in Parliament, the handshake between opposition leader Raila Odinga and Uhuru notwithstanding

Minority side ODM, led by Suba South legislator John Mbadi, will also on Tuesday converge at County Hall to take a common position on Uhuru’s proposals.

“I don’t expect a partisan approach to this matter. In fact, a majority of Jubilee MPs have indicated they would oppose the proposals. We are still insisting on zero tax on petroleum products,” Mbadi told the Star. “We have called for a Parliamentary Group meeting as the minority side on Tuesday at 8am to take a position.”

Read:

The ODM chairman said their opposition has nothing to do with politics, but the plight of the majority. To veto Uhuru’s proposal, the House must garner a two-third’s vote. There are 349 MPs and at least 233 must vote to overturn the memorandum.

NASA has 136 lawmakers, while Jubilee and its affiliate parties have 213 MPs in Parliament.

Nyando MP Jared Okelo defended the MPs’ earlier decision to defer the tax by a further two years and have the government consider austerity measures.

“The decision was to provide safety in terms of affordability of essential products by Wanjiku, which will definitely go higher by any single digit of tax levy,” he said. Okello said instead, serious austerity measures and a sustained war on corruption need to be the first approaches to fix the budget.

Homa Bay Woman Representative Gladys Wanga differed with her colleagues, saying she will support the eight per cent proposal as a matter of principle.

“It was a delicate balancing act. The matter should not be approached by Parliament from a Jubilee-ODM perspective; it requires a bipartisan approach,” she said.

Ugunja MP Opiyo Wandayi, who chairs the Parliamentary Accounts Commitee, appealled to MPs to thoroughly interrogate the issues contained in Uhuru’s memorandum.

“On the supplementary budget estimates, I will only comment authoritatively once they are tabled on the floor of the House,” he said. Rarieda MP Otiende Amollo said Uhuru’s memo on the 16 per cent VAT is subterfuge and diversion.

“We need to reject the 16 per cent VAT and discuss amelioratory mechanisms later. Let each MP stand to be counted,” he tweeted.

See also:

Mvita MP Abdulswamad Nassir said lowering the tax from 16 per cent to eight per cent will not ease the cost of living burden on Kenyans. Mombasa senator Mohamed Faki said Parliament should not give in to Uhuru’s proposal, saying MPs have a duty to protect the interests of the people they represent.

Belgut MP Nelson Koech said taxpayers’ resources are being misused by state officers, including those working in the counties. “There are some nonessential goods and services which the government may have to do without for now. Austerity measures must be put in place,” he said.

Koech said misuse of state and county vehicles if curbed, can help reduce expenditure. “There is a fully fledged department that is mandated to ensure that government vehicles are being used for official duties only and during the right time. This must be adhered to and we want to see action being taken against those breaking that law,” Koech said.

Kenya is under pressure from the International Monetary Fund to raise its revenue base and stop relying on loans to run its economy.

The 18 per cent VAT on fuel was seen as one of the ways of bridging the budget shortfall without pushing up the country’s debt, which currently stands at Sh5 trillion.

More: