If Kenya Kwanza is successful in pushing through the Finance Bill, 2023, then you can expect inflation to go up. This is because primarily, it will occasion higher costs of fuel as well as taxation of products that were not being taxed.
Because of high inflation, you can expect the Central Bank will continue to have high interest rates, which call for a tight monetary policy.
This means Kenyan businesses can expect to pay high interest rates which might rise even higher. All the above means that growth or economic activities are going to slump.
Out of more than a thousand memorandums presented to the committee, more than 90 per cent did not support the taxes and they showed the committee the various ways in which the taxation measures are going to hurt the economy and hurt Kenyans, especially those at the bottom of the pyramid.
It is quite clear. These measures are not putting money in anybody’s pockets. These taxation measures are taking whatever little coin you have in your pockets.
This thing is not only being rushed but as John Mbadi (ODM chairman) has pointed out, it is not following the law and Standing Orders properly.
The correct order is for the bill to be introduced after the budget highlights of the Cabinet Secretary of Treasury.
This bill was already introduced and canvassed for second reading before the CS presented the budget.
Overall, what you can conclude – in the last week and this week – this regime is in a very big hurry to do major things that affect the very foundation of the economy.
Last week, they borrowed Sh213 billion in the infrastructure bond at a very high interest rate of nearly 16 per cent.
This regime also is trying very hurriedly to pass an amendment to the Public Finance Management Act, 2012, that affects the very structure of debt management.
If that bill is passed, it reduces parliamentary oversight of the debt ceiling.
They are in the biggest hurry to pass these taxation measures and the reason is they know the taxation measures are completely unpopular.
Azimio Economic Council member spoke to the Star