A section of Jubilee MPs opposed to the contentious VAT on petroleum products were last evening divided on whether to attend or boycott today’s Parliamentary Group meeting at State House, Nairobi.
President Uhuru Kenyatta Friday sent the Finance Bill, 2018, back to the National Assembly with counter proposals including reducing the levy from the earlier 16 to 8 per cent but the MPs were not amused.
His memorandum also contained wide-ranging austerity measures and drastic budget cuts to plug the 2018/19 fiscal deficit.
MPs from across the political divide are torn between party loyalty and responding to the cry of the electorate reeling from an upsurge in the cost of living due to high taxes.
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The President has proposed to chop Sh5-7 billion from the National Assembly, Sh2 billion from the Senate, Sh6 billion from the CDF and Sh8.7 from the roads emergency fund to plug the deficit of Sh500 billion.
The proposals to be tabled in the National Assembly on Thursday will be the Treasury’s first supplementary budget of this financial year.
Treasury had hoped to raise up to Sh35 billion through the implementation of the 16 per cent VAT on petroleum products, which MPs rejected.
The President’s new proposal of 8 per cent would raise only Sh17.5 billion, hence the other additional measures.
The President’s meeting today with Jubilee MPs and those from friendly outfits is to enable him explain why approving the fuel tax and budget cuts is important.
The Head of Public Service is said to have issued a quiet directive freezing spending on foreign travel, training and hospitality as part of Uhuru’s austerity measures.
THRESHOLD
The MPs must garner two-thirds (233) of the 479 members to overturn the President’s memorandum and revert to the initial bill that set the VAT on petroleum products at 16 per cent but suspended until 2020.
It is understood that the President wants the Finance Bill done and over with before he leaves for New York over the weekend to attend the UN General Assembly.
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MPs opposed to the introduction of the levy on petroleum products that are currently zero-rated argue that the revenue is meant to repay huge loans from China and not necessarily to fund the 2018/19 budget.
They want the Executive to seal loopholes of corruption and waste of public funds and use the savings to finance the Sh2.6 trillion budget.
“We must be awake to the fact that the cost of living has hit through the roof. Our people can no longer afford basic commodities. I will not personally attend the meeting but I want to vote with my conscience on Thursday,” said a Jubilee MP from central Kenya who sought anonymity.
“We don’t want any further taxes. The people I represent don’t want additional taxes when billion are carted away daily in corruption networks,” he added.
Those who said they will snub the State House meeting today said if identified they might be sanctioned by the party.
National Assembly Majority leader Aden Duale and Majority Whip Benjamin Washiali are said to be under instruction to maintain a voting list of all members, an indication the party would want to discipline errant ones.
“Jubilee is the party that is ruling, it is the party that prepares the budget and proposes how to raise revenue. There is no way a member of the same party can frustrate the executive’s taxation measures,” said a top Jubilee secretariat official.
Yesterday some Jubilee MPs were gearing for a major mutiny against the sponsor party after they affirmed their position to reject Uhuru’s memorandum.
OVERTAXED
Signaling the looming political standoff in Jubilee itself, Kimilili MP Didmus Basara said MPs will shoot down the President’s proposal altogether because Kenyans are already over taxed.
Barasa challenged his colleagues to stand by public good and reject the executive’s incessant appetite for high taxes at the expense of the common Mwananchi.
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“Parliament will be blamed if at all we will approve the President’s increase of fuel tax. As MPs we are going to vote against the bill. We are going to shoot it down,” vowed the vocal Jubilee lawmaker.
But Wajir Woman Representative Fatuma Gedi said she will support the reduced VAT of 8 per cent but oppose any move to slash CDF and allocations to Parliamentary Service Commission.
"Treasury should look for other areas in the budget where they can cut. As much as I support the austerity measures being instituted by government, we also want to see stern action being taken on those misusing public resources," she said.
MPs Jubilee have been busy lobbying their colleagues within and from other parties, especially ODM, to attend Thursday’s sitting
so that they can raise the two thirds required to overrule the President.
MPs from Raila Odinga’s ODM party are also expected to meet
this morning
to discuss the President’s memo and adopt a common position.
But the Opposition lawmakers are also divided on the issue, with some vowing to join their Jubilee colleagues to vote against the President’s memo.
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Yesterday, the legislators mainly from Rift Valley claimed that
today’s meeting would not achieve much because they will not be given a chance to raise their concerns regarding the proposed budget cuts.
“We are tired of lectures and insults,” protested a vocal MP from North Rift, recalling that each time they have been summoned to State House, only Majority leaders Kipchumba Murkomen, Aden Duale, Deputy President William Ruto and the President have spoken.
“It’s a monologue where the leaders speak and we listen and when we speak we are threatened,” said another Jubilee MP from South Rift.
HANDSHAKE PARTNER
On the day Uhuru will be seeking to rally his allies to back his tax proposals and wide-ranging budget cuts, his partner Raila Odinga will hold a meeting with ODM MPs to beseech them to support the President.
This is amid growing rebellion from MPs allied to his Orange party who have threatened to galvanise support against the tax proposals. They argue it would hurt the economy and diminish the purchasing power.
The Opposition chief has also found himself in an awkward position having told Kenyans that Uhuru would sign the Finance Bill, 2018, into law to suspend the VAT tax until 2020.
Speaking when Uhuru was in China, Raila said the President would assent to the bill to offer Kenyans reprieve from the pain at the pump after the fuel prices were hiked on September 1.
"You should not panic at all. Very soon the President will scrap the heavy levy on fuel products. He listens to public outcry," Raila said.
In an indication of the looming political storm, Raila’s allies yesterday reiterated that they will not entertain additional taxation on Mwananchi.
Siaya Senator James Orengo urged National Assembly members to reject the President’s memorandum altogether.
“We are being pushed to an era of tax and spend. If we follow this direction then we are going to support extravagant spending of the Jubilee government,” Orengo said at a press conference.
Orengo, also the Senate Minority leader, said it was time that MPs showed their commitment to the Constitution and the rule of law by standing with Kenyans.
“If allowed to stand it will have spiral effect not only for ordinary Kenyans but also (be) bad for manufacturers. As we stand now the promises made by Jubilee in 2013 are a pipedream,” he said at Parliament Buildings.
OPPOSITION
MPs Richard Onyonka (Kitutu Chache South), Caleb Amisi (Saboti), Jared Okelo (Nyando) and Mark Nyamita (Uriri)
expressed confidence that they will override the President and have the tax on fuel zero-rated to cushion millions of poor Kenyans.
Amisi and Nyamita said they have so far lobbied 240 members who will vote ‘NO’ against Uhuru’s reservations when the MPs deliberate on the reservations on
Thursday.
“So far 240 MPs have signed up and as to whether they will be compromised in their respective PGs that one we will leave to Kenyans to see. If we are going to go to PGs and sell our conscience it will be very unfortunate,” said Nyamita.
“No amount of intimidation or coercion from any quota will dissuade us from aligning ourselves to the wishes of Kenyans,” said Okelo.
“You cannot tax yourself to prosperity. We need to carry out budget cuts in all government ministries,” added Amisi.
The MPs also want the National Government Constituency Development Fund (better known as CDF) and the National Government Affirmative Action Funds for women representatives left intact.
“CDF is the most successful fund in the country. How can you even imagine touching such Fund,” said Onyonka.
“CDF is a no go zone, this is the only development fund which is being felt by the common man across the country. This one we are not going to negotiate,” added Nyamita.
Naivasha MP Jane Kihara Kihara also vowed that she will oppose the
reduction of the CDF allocation because it has uplifted the lives of many people in rural areas across the country.
“CDF has continued to support poor students with bursaries and plans to reduce the allocation are ill-timed,” she said.