MPs adopt Uhuru memo, stage set for Sh130b in taxes
3 months ago, 20 Sep 16:08
Confusion marred debate on the president's reservations on Finance Bill, 2018, after MPs expressed sharp disagreement with the manner in which the vote on the introduction of the fuel tax was conducted.
The House adopted the reservations during a chaotic sitting on Thursday, characterised by boos and jeers and bearing similarities to the enactment of Security Laws (Amendments) Bill, 2015.
With the victory, the executive has the power to raise up to Sh130 billion through taxes including the eight percent levy on fuel products, that will see about 17.5 billion realised.
Sugar confectioneries will bring in about Sh475 million, money transfers Sh11.4 billion, betting companies and winners Sh30 billion, the housing fund 10 billion and kerosene Sh9.8 billion.
The memorandum proposed a deletion of the 0.05 percent 'Robin Hood' tax which had been proposed on money transfers of at least Sh500, 000.
The government plans to recoup the lost revenue through the 20 percent imposed on the charges banks levy customers in money transfers, meaning that the transfer charges could still go up.
There is also a new proposal to increase the price of kerosene by Sh18 per liter to check adulteration of fuel as well as split the current 35 percent tax on betting companies to include the winners.
The target in this case is to raise Sh9.8 billion. This will see betting companies charged 15 percent, on top of the 30 percent charged in terms of corporate income, and winners 20 percent.
All had seemed normal as MPs arrived in the morning for the sitting specially created to allow them to discuss the supplementary budget estimates and the reservations on the bill.
The first sign that trouble lay ahead emerged when Kiminini MP Chris Wamalwa stood on a point of order and sought to amend the Order Paper to reorganise the business of the day.
In his presentation, Mr Wamalwa said he wanted the president’s reservations debated ahead before the budget estimates. Speaker Justin Muturi refused to barge and informed the House that the paper was cast in stone.
The MPs easily approved the financial estimates, saying they had no problem with the decision by the executive to reorganise allocations due to various departments and ministries.
In the estimates, the Treasury slashed Sh3.026 trillion budget for the current financial year by Sh37.6 million.
The approval of the budget gives the government legal backing to spend the re-organised budget once it is signed into law by the president.
When time came to debate the finance bill, boos, jeers and renditions of bado mapambano (the struggle continues) enveloped a House united for the first time in a long time as MPs continuously chanted “zero”.
This was in reference to their push for fuel to be zero-rated much as it will cause the ordinary Kenyan to struggle more.
Mr Muturi had ordered a second vote but ended up upholding the halving of the 16 percent Value Added Tax on petroleum products.
There was no smooth sailing for the executive ...
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