During the last week of August, Parliament voted to extend the delay in adding VAT to fuel costs for another two years. This is the third time that Parliament has postponed the tax.
The first extension was in 2013, immediately after passing the fuel tax law. Parliament agreed to tax fuel, but postponed the execution date for three years. In 2016 the looming election made it untenable to implement the fuel tax.
It would have sounded the death knell for the Jubilee government as the backlash would have been massive; and the opposition would have leveraged on the anger.
Parliament pushed the ball down another two years to September 1, 2018. We then tried to push the ball down again, for another two years. But we did it too late and the bill did not get to the President by August 31. On September 1 the tax kicked in and Kenyans saw ‘red’.
But it is not Treasury CS Henry Rotich’s fault that we are paying more for fuel. This is a decision made over five years ago. If anyone is to be blamed, it would be Parliament. If we were actually serious about stopping the tax implementation date, we would have discussed this Bill in good enough time to send it to the President to be signed by August 31.
If the President would not have signed it, the bill would still have kicked in automatically if he had received it by August 14.But there is a larger discussion we are running away from.
We have the Big Four agenda. Big Four is about creating food security which means direct production of more food; as well as creating more jobs so more people can put food on the table for their families. Big Four is also about industrialisation, with a plan to create 1.3 million manufacturing jobs.
Big Four is also about universal healthcare; specifically getting 100 per cent health coverage for every Kenyan home. Finally Big Four is also about housing; we need to build at least 500,000 affordable. All this by 2022.
Now we all understand the benefits we will receive once the government delivers on each of these goals. Living standards will get better. No Kenyan will sleep hungry. Every Kenyan will have access to basic healthcare. More Kenyans will own homes.
But do we know what we need to do to achieve this? Do we understand that the government needs to invest more money in agriculture, housing, healthcare, industrialisation, education facilities, etc, for us to get to where we want? Do we understand the government needs more money for this to happen? Do we also understand that for the government to get more money they must raise more in taxes, and borrow more?
This is the reality we must face. We have a very ambitious development plan that will change lives fundamentally, at the lowest possible economic level. This will push everyone’s life up. It will also lead to better relations between Kenyans, less crime and more focus on innovation and economic growth. All good. But someone has to pay for all these good things. That person is you … and me.
However I hope to see Rotich factor in money recovered from corruption in his next budget. This will make the high costs we are incurring now more palatable.