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September 20, 2018

Leaders criticise CS Rotich over fuel price, say it hurts economy

PS Kamau Thugge, MP Kimani Ichung’wa, Treasury CS Henry Rotich and National Assembly Majority leader Aden Duale arrive in Parliament to present the 2018-19 budget on June 14 /JACK OWUOR
PS Kamau Thugge, MP Kimani Ichung’wa, Treasury CS Henry Rotich and National Assembly Majority leader Aden Duale arrive in Parliament to present the 2018-19 budget on June 14 /JACK OWUOR

Kakamega governor Wycliffe Oparanya has asked MPs to remove Treasury CS Henry Rotich for defying their decision on fuel taxation.

He said actions by Rotich to ignore a decision by MPs to defer introduction of 16 per cent VAT on petroleum products was the highest level of impunity that should not be allowed. 

“We know increase in fuel costs affects every commodity. We thought that when oil was found in Turkana, the price of fuel would drop but we’re still where we were,” Oparanya said.

Last week, MPs unanimously voted to suspend implementation of the 16 per cent VAT on petroleum products. The MPs voted for MP Junet Mohamed’s proposal pushing the implementation of the 16 per cent VAT to September 1, 2020.

Oparanya said the CS is a mere appointee and cannot overrule MPs who are elected by the people to represent their interests.

Former Medical Services minister Amukowa Anangwe said Treasury’s decision must be condemned and resisted by Kenyans, irrespective of party affiliation, gender and ethnic identity. 

“The consequences of the decision are adverse and the ripple effects are far-reaching on the economy. The petrol prices in Kenya will be the highest in the region, worse than the landlocked countries and the tax burden will inevitably cause other petroleum-dependent subsectors to hike their costs to the detriment of the consumers,” he said.

Anangwe said it is a great paradox that corruption in government is still rampant, but taxes are being imposed with abandon by a reckless regime that has a warped sense of entitlement to relegate Kenyans into dire poverty through irrational fiscal policies on others.

Gazettement of the new taxation regime on oil has triggered condemnation by a cross-section of Kenyans.

“Whatever, the motivation, public interest is best served when this particular decision is rescinded forthwith, and more palatable alternatives are substituted, including cutting down public expenditure and curbing corruption and wastage in government,” Anangwe said.

Lurambi MP Titus Khamala said Rotich will face the wrath of MPs for forcing taxes on fuel “through the backdoor”.

“You have dared us as MPs and we’ll impeach you. We want a leadership that is sensitive to the plight of Kenyans,” he said.

Khamala said Kenyans will in 2022 vote in leaders who are not tainted with corruption.

ANC leader Musalia Mudavadi said other than the adverse effects on the poor and economy in general, the imposition of 16 per cent VAT on petroleum products is a lazy recourse to a law that has been suspended twice – in 2013 for three years and 2016 for two years. The suspension lapsed on August 31.

In June, Rotich had said petroleum products would start attracting 16 per cent VAT from September 1.

This will add about Sh17 on every litre of the commodity. Rotich argued the implementation of the Bill was in line with agreements with the International Monetary Fund.

But Mudavadi said Treasury has no justifiable economic reason for the increase.

“At no time should government be dictated by a wrong sense of entitlement to fleece Kenyans by whatever means,” he said.

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