Lugari MP Ayub Savula has asked Treasury Cabinet Secretary Henry Rotich to remove the tax exception granted to importers of materials for the standard gauge railway.
Savula said the exemption was hurting the economy by shrinking revenue collection by the Kenya Revenue Authority. The country has a budget deficit of Sh500 billion.
“The SGR is not a grant by the Chinese government but a loan. We must maximise the profits to repay the loan. What is happening amounts to Kenyans paying taxes to the government of China,” he told the Star on the phone on Tuesday.
Savula said Rotich should, in his budget speech next month, announce the lifting of the tax exemption.
He said the government should do so to avoid "squeezing the already overtaxed Kenyans".
The MP said it was wrong to exempt foreigners from tax yet they are making profits, only to end up pressing Kenyans with high taxes to reach revenue targets.
Savula said the high taxation regime was pushing Kenyans to the brink and making them engage in unorthodox means to make ends meet.
On Saturday, ANC leader Musalia Mudavadi said the high taxation was a result of rampant corruption and over-borrowing by government.
Mudavadi asked lawmakers to scrutinise the 2019-20 budget of any hidden figures before approving it.
“A lot of money has been lost in the past and when you ask, you are told of Ifmis and computer errors. We want to know whether these errors are man-made or accidental,” he said.
On Tuesday, Savula claimed the Kenya Bureau of Standards was harassing importers at the Inland Container Depot in Embakasi “and demanding bribes”.
He said Kebs was holding imported goods belonging to many companies on flimsy grounds.
“Companies are going through hard times because they have imported goods but are held at the port. As a result, many companies are retrenching workers because of lack of business and over taxation. I am aware of a company that has laid-off 70 per cent of its workers,” he said.
President Uhuru Kenyatta on Monday ordered the ICD management to clear all confiscated goods within three weeks.
The government will vet, register and gazette all import cargo consolidators to root out tax evaders.
(Edited by R.Wamochie)
