President Uhuru Kenyatta looked set to have his way last night after Wiper MPs joined ODM colleagues in declaring support for his memorandum and proposed budget cuts.
The MPs appeared to soften their opposition after the government agreed not to slash the CDF and the National Government Affirmative Action Fund. Proposed cuts in the two funds had angered most MPs who pledged to marshal the two-thirds majority required to overturn the President's proposals. The vote is today.
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Uhuru proposed several areas of taxation in his memorandum to the House and the Jubilee Party Parliamentary Group meeting on Tuesday at State House. He pleaded with his brigade to support it.
Opposition leader Raila Odinga also led his troops at Orange House to support the government.
Treasury CS Henry Rotich robustly defended the cuts.
However, despite entreaties, defiant MPs from both Jubilee and the opposition pledged to vote against the President.
Yesterday Wiper leader Kalonzo Musyoka
said, “Difficult as the matter is, this is the time to stand up to be counted.”
“I hope sincerely the vote tomorrow [today] will not be about the handshake. I am quite sure the matter should be seen differently. It's not a matter of the handshake,” the former Vice President told a press conference.
Kalonzo said his support for President Kenyatta's reduction of the VAT on petroleum products conformed with Wiper resolutions in July to work with Jubilee.
“I call upon all Wiper members to give unequivocal support to proposals by the President, particularly reduction of fuel tax from 16 to eight per cent," he said at his Karen home.
ODM has 65 MPs, Wiper has 20 and Jubilee has 146.
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Majority leader Aden Duale spent most of the day trying to persuade Jubilee MPs not to mobilise troops and overturn Uhuru's memorandum.
"We have made good progress, especially in the CDF issue. The government has ceded some ground and we almost agreed," Duale said last evening.
Even as the government went into overdrive, the High Court dealt it a blow when it outlawed the Finance Bill [deferring VAT] because "there was no public participation."
Justice Wilfrida Okwany said it was dangerous to implement a bill without public input.
She declared the Provisional Collection of Taxes and Duties Act
"unconstitutional and therefore invalid, null and void" and the Provisional Collection of Taxes and Duties, Order 2018, also unconstitutional.
The court decision implies the new taxes imposed on kerosene, bottled water, mobile money transfers, imported vehicles and the Robin Hood tax were unlawfully effected.
She ruled in favour of activist Okiya Omtatah who sued Treasury CS Rotich, the KRA commissioner general, the National Assembly and the Attorney General.
In Parliament yesterday, Rotich told National Assembly Finance committee to accept Uhuru's proposals. He said some tax proposals aimed to "widen the tax bracket."
“We reformed the tax law in 2013 because almost everything, 435 items, were tax-exempt. This was to expand the tax base because we've been losing revenue because of the narrow tax base."
When asked why the government proposed to tax sugar confectioneries like sweets, which MPs said will kill industries, Rotich said the levy aimed to regulate consumption.
Rotich told the Finance committee the cost of treating conditions related to sugar consumption far outweighs the benefits.
"We are complaining about the tax, yet we are spending more on health challenges," he said. "By discouraging this, you are protecting Kenyans' health. These are WHO recommendations and it's where the world is headed.
The committee was considering the Uhuru's memorandum on the Finance Bill and today it will recommend adopting or rejecting it.
To defeat or alter Uhuru's memorandum requires at least two-thirds, 233 of
349 MPs.
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