Government sweeteners on Finance Bill that failed to persuade Kenyans
Protesters demonstrate against the Finance Bill in Eldoret town, Uasin Gishu County on June 25, 2024.
What you need to know:
- Amendments failed to assuage the public, which called for the total rejection of the Bill.
- The opposition had earlier indicated that they would push for several amendments to the Bill.
Despite several sweeteners, the Kenya Kwanza administration failed to convince the public to embrace the Finance Bill, 2024, which has since been withdrawn.
The Bill having been widely rejected by key stakeholders during the public participation exercise, the government came up with several proposals in a frantic effort to win public trust and invite the opposition to participate in the passage of the Bill in Parliament.
Stakeholders who appeared before the National Assembly Committee on Finance and National Planning raised critical concerns over certain proposals.
Among the areas of concern were the 2.5 per cent motor vehicle tax, the 16 per cent VAT on bread and the increase on mobile money services. Consequently, the government retreated and agreed to drop some of the proposals deemed as punitive.
Last week, during a Parliamentary Group meeting at State House, Nairobi, the government bowed to public pressure and backtracked on some of the taxes and levies that had been proposed in the Bill.
During the meeting, the government-allied MPs amended the proposed taxes on bread, motor vehicle, pensioners, and farmers.
Also struck out in the Bill was the proposed value-added tax on transportation of sugar cane, financial services and foreign exchange transactions.
Regardless, the amendments failed to assuage the public, which instead intensified calls for the total rejection of the Bill.
The Kenya Kwanza administration had hoped that by dropping the contentious clauses, they would rope in the opposition during consideration of the Bill at the committee of the whole House stage.
The move failed after the opposition decided not to propose any amendments to the Bill, leaving the consideration of the Bill during the committee of the House a government affair.
On Monday, during a joint Parliamentary Group meeting, the leadership of the Azimio la Umoja coalition directed all its members who had proposed amendments to the Bill to immediately withdraw them. The proposals, they said, would be an exercise in futility.
“It (the proposed amendments) was going to sanitise a process that we have since declared flawed. We came to this painful decision to have these amendments dropped because prosecuting them was going to be in vain. It was going to be a futile exercise,” Minority Leader Opiyo Wandayi said.
The opposition had earlier indicated that they would push for several amendments to the Bill, including the deletion of the Export Promotion Levy of 10 per cent on clinkers for manufacture of cement which they termed as a tool for stagnation and meant to stifle competition.
Although the House Standing Orders does not stipulate that the minority side must participate in a debate of the House, the perception created when such an important Bill with financial ramification to the public was reduced to a one-side affair raised a lot of questions on the urgency and motive of the ruling coalition.
The government then sent messages to the MPs that if the Bill failed to sail through, then they would risk losing the Sh100 million allocated for National Government Constituency Development Fund (NG-CDF).
On the eve of the second reading of the Bill, Nation. Africa established that several MPs had received the said message on the NG-CDF funds.
Since the funds is so dear to MPs, it appears the motive trick was to appeal to their emotions of the opposition lawmakers to change their stance on the Bill.
Sources indicated that some MPs who had asked for government support on certain projects were also warned that the said projects would not take off unless they voted in favour of the Bill.
Githunguri MP Gathoni Wamuchomba confirmed receiving the said messages, which she said were being sent by ‘Treasury mandarins’.
“They have been sending messages telling us that we would not get CDF and that there would be funds to hire Junior Secondary School (JSS) teachers. These are all blackmail tactics,” Ms Wamuchomba said.
The government plan to hire 46,000 JSS teachers on permanent and pensionable basis.
Homa Bay Town MP Peter Kaluma said they were ready to forego CDF if it meant dropping the punitive clauses contained in the Bill so as to save Kenyans from unnecessary taxes.
“We are tired of blackmail. Let them come for that CDF if it is what will save Kenyans from these taxes,” Mr Kaluma said.
Nation. Africa also learnt that some government agencies had also received circulars from the Treasury on the budget cuts they would be subjected to if the Bill didn’t sail through.
“We received a circular telling us that we would lose Sh9 billion if the Finance Bill doesn’t pass,” said a source in one of the constitutional commissions.
Matters spiraled out of control on Tuesday after the government-allied lawmakers approved the Bill in its third reading.
Protests were witnessed in 35 counties with demonstrators in Nairobi storming the Parliament after daylong protests that turned violent in an unprecedented turn of events.
With pressure piling, particularly from the youth, on Wednesday the State finally bowed to pressure and President William Ruto announced that he would sign the Bill.
While withdrawing the Bill, the President said he made the decision after listening to the voice of Kenyans who wanted nothing to do with the Bill.
The Head of State called for a dialogue with various stakeholders, including the youth who came out strongly to voice their opposition on the Bill.
“Having reflected on the continued conversation on Finance Bill 2024, having listened to Kenyans, I concede. The Bill has been withdrawn,” President Ruto said.
