Raila’s fresh threat to mobilise Kenyans to reject Finance Bill
By Rawlings, May 17, 2023Azimio la Umoja leaders yesterday threatened to mobilise Kenyans to reject the Finance Bill, 2023 if MPs fail to shoot it down in Parliament.
Led by Opposition leader Raila Odinga, the Azimio team which included Narc Kenya leader Martha Karua and her Wiper counterpart Kalonzo Musyoka accused the Kenya Kwanza government of setting out to push the bill through the National Assembly without any changes.
“We make it clear that if this Bill is railroaded through Parliament, Kenya Kwanza must prepare that we will have no option but to mobilize citizens around the country to fight for themselves and take all the necessary political actions to stop this blow and burden,” warned Raila.
Raila termed the bill, which proposes amendments to various tax statutes including the Income Tax Act, Value Added Tax, Tax Procedures Act and the Miscellaneous Fees and Levies Act, as too punitive.
Addressing a press briefing at Jaramogi Oginga Odinga Foundation (JOOF) in Upper Hill, Azimio la Umoja One Kenya Coalition leaders led by Raila Odinga charged that the Bill should be rejected in its entirety as it would hurt the already overburdened citizens.
Ripe for tax reform
“We restate that for Azimio, this Bill remains a big no. It is our position that this Bill does not qualify as a just tax system. The country is ripe for tax reform but this is not one of them,” said Raila.
He further argued that the proposals outlined in the bill cannot address poverty, saying that instead, it seeks to manufacture and distribute poverty.
“This proposal does not spur economic growth or generate wealth so that every family in this country can have opportunities. It traces and kills those opportunities. As the Bill attacks the poor, it dismantles the middle class too,” he said.
The Finance Bill 2023 proposes an introduction of 16 per cent Valued Added Tax (VAT) on petroleum products as well as the introduction of withholding tax on payments made in respect of digital content monetization.
Revision of taxes
The Bill currently before the National Assembly also proposes the revision of the rate of tax applicable to the permanent establishment (PE) of a foreign entity and the introduction of a tax on repatriated income of the PE.
IT also proposes an increase of the marginal tax rate applicable to employees from 30 per cent to 35 per cent and a requirement to deposit security of 20 per cent of disputed tax before appealing against a judgment to the High Court.
On Sunday President William Ruto, defended the introduction of three per cent employee and employer contributions to the National Housing Development Fund.
But according to Raila, the Finance Bill 2023 unfairly punishes the middle class which is already suffering and cannot afford to pay more taxes, adding that the most tangible result of the Bill will be the incorporation of more Kenyans into the ranks of the poor.
While demanding a major surgery to the Finance Bill in the interest of the suffering people of Kenya, Raila asked Kenya Kwanza to address the economy’s many structural shortcomings.
“There is a reason why the Kenya Revenue Authority is unable to meet its revenue targets. Kenya Kwanza must figure out and address the problem. The cash flow problem in the country is due in part to the weakening of the Kenyan currency,” he said.
He argued that the rise in the price of fuel and the continuing fall of the shilling means the cost of everything goes up, again. Raila stated that Kenya Kwanza administration must strengthen and not undermine critical institutions such as those tasked with fighting corruption, collecting revenue and investigating and prosecuting crimes as it is presently doing.
He further proposed that Kenya Kwanza must incorporate all productive citizens into its nation-building projects, adding that the regime has alienated a huge section of the population who see themselves as outsiders and strangers in their own country.
“Kenya Kwanza must rationalize public expenditure. It must live within its means, instead of spending money it does not have on programs and projects the country does not need. They must address the public concern that even as taxes rise on everything and for everyone, there is no clear plan to spend new tax revenues on welfare programs for the poor. Instead, those taxes will only stoke inflation and hurt the purchasing power of poor families.”
State propaganda
Raila recalled that Azimio had warned that despite all State propaganda, trying to ease the supply shortage of maize and lower its costs through duty-free imports would not work and prices would not come down.
Instead, he charged that to ensure the subsidy is passed on to consumers, the government would have to agree with traders on a formula on various margins and costs, adding that such negotiations have failed as was expected.
“If importation is to lower the market price of maize, the volume of imported maize would have to be massive. Reports indicate that not many importers took the offer. The net effect is that the price of ‘unga’ has not come down. Instead, they are set to rise, again.”
He went on: “Because Kenya Kwanza essentially sees Kenyans as its beast of burden, even this darkening scenario has not been able to persuade the regime to seek middle ground on the Finance Bill.”
“The Kenya Kwanza hubris has kicked in. The top leadership of the Kenya Kwanza regime in Parliament and the Executive have said the Finance Bill will pass as it is. They have said not even a coma shall be removed.”
“It is clear the so-called public participation being invited is a mere charade and a gimmick to give Kenyans false hope before they are hit with the Tsunami of taxes beginning July. Already President Ruto had said that the three percent housing levy to be deducted from basic salaries is mandatory patriotism while his National Treasury Cabinet Secretary Prof Njuguna Ndungu opined that Kenya Kwanza is hiking taxes to catch up with neighbours.