Experts have faulted National Treasury mandarins for failure to execute a proper strategic communication strategy, leading to huge public rage against the Finance Bill, 2024.
President William Ruto had also admitted that his communication team might have slept on the job and failed to provide adequate information about his tax-raising measures.
Ruto said that if he had been given a chance to explain the content of the Bill and its impact on the country’s economy, every Kenyan would have agreed with him.
“We did not explain ourselves better, I am sure my communication team failed, and our communication architecture did not deliver. The message did not get out to the people,” Ruto stated on July 1.
Independent communication experts agree with the President that his team and top Mandarins at the national treasury failed to communicate effectively.
The analysts argue that ex-National Treasury Njuguna Ndung’u did not step forward to explain to Kenyans details of the Finance Bill, 2024 and highlight the thinking behind the tax proposals.
The communication vacuum created by Ndung'u and the failure by the National Treasury to craft a citizen-centric budget gave misinformation and disinformation architects a field day.
For instance, communication experts argue that the ex-CS Ndung'u and his team failed to hold any engagements with the media to explain the radical tax proposals.
Ndung'u did not appear on TV stations during prime-time segments to field questions and elaborate on why the government was opting for certain tax measures.
Treasury Principal Secretary Chris Kiptoo was tasked on June 13 with providing information on the proposed 2.5 per cent annual tax on the value of a motor vehicle.
The PS, however, stumbled over his words during an interview on Citizen TV's Tonight Show as he defended the government against stakeholder and public concerns that the motor vehicle tax was a double taxation on owners.
He stated that the decision to implement the vehicle tax was based on the administration's agenda of raising adequate revenues to stabilise the country's economy.
However, he could not explain why the additional tax was imposed on top of the insurance premium, which is set at 4.5 per cent of the vehicle's value.
Instead, he dismissed the concern as 'a non-issue,' stating that the matter would be reviewed later by Members of Parliament and that public opinion would be allowed on the subject.
“This is not the proposal of the National Treasury, the National Treasury takes into account the views that come through the budget-making process. We are operating in a very tight fiscal space and we have to make very tough decisions. Some of these tough decisions are about trying to make sure that we live within our means. The issue of motor vehicle circulation shouldn’t be a big issue because there are many other options,” Kiptoo said.
Political analyst and strategic communication expert Alexander Nyamboga said Kiptoo's approach might have angered Kenyans.
''The National Treasury officials were groping in the dark and failed Kenyans," Nyamboga said.
Leaving the whole matter to politicians including National Assembly Finance Committee chairperson Kimani Kuria and his Budget and Appropriations counterpart Ndindi Nyoro left a huge gap.
On Monday Political Risk analyst and communication specialist Dismus Mokua said strategic communications is an indispensable proposition in leadership.
He said Ndung'u being a technocrat did not invest time in structured public participation that would have informed and influenced conversations around the Finance Bill 24/25.
“Ndugu’s failure to engage in citizen-centric public participation created the impression of a National Treasury not aligned to citizens' expectations, fueled resentment for tax proposals and gave Gen Z lobbying and demonstrations currency," he said.
Ndung’u had been in charge of the country’s treasury for twenty months before Ruto fired him after he stirred up a hornets’ nest with his tax proposals that triggered countrywide protests.
“Recent events that necessitated the withdrawal of the Finance Bill which will require a review and reorganisation of our budget and fiscal management have brought us to an inflection point,” Ruto said on July 19.
On the flip side, Mokua said, Ndung’u created an environment for Kenya to recalibrate and celebrate a new beginning.
“Gen Z demos have elevated the role of public participation in policy growth and development, public participation will no longer be mechanical nor ceremonial," he said.
There have been concerns that the Treasury’s failure to engage the media and communicate key aspects of the Finance Bill 2024/5 created a problem for President Ruto’s government.
The errors of both omission and commission catalysed Gen Z's push for reforms and the invasion of Parliament.
However, the protests gave President Ruto a blank cheque to implement radical reforms across government including firing 11 of his Cabinet Secretaries.
On Sunday evening, President Ruto said the Gen Z-led protests gave the country a chance to rebuild.
"Yale mambo yametokea, sio maneno mabaya zaidi kwa sababu yametupatia nafasi ya kutengeneza Kenya mpya," Ruto said.
(What we have witnessed is not so bad in the end because it has given us a chance to rebuild our country afresh).
It emerged that the government realised the National Treasury’s communications challenges when the Gen Z agenda gained national currency with citizens supporting the rejected Finance Bill 24/25.
Efforts to retain trajectory after removing the controversial tax proposals proved futile because the train had left the station.
Insensitive and irrational comments by the Finance Committee chairperson could also have added fuel to the raging fire.
On May 17, Kuria explained that the National Treasury's proposal to introduce a 16 per cent Value Added Tax (VAT) on bread was aimed at addressing diabetes challenges.
Speaking on Citizen TV's ‘Tonight’ show, Kimani noted that the Treasury cited the high occurrence of diabetes among bread consumers when making the proposal.
"We had a very long conversation with the Treasury on this VAT. The initial thinking was that there is a concern about diabetes," Kimani said.
"The argument we are receiving from Kenyans is that bread is not a luxury good. People have it every morning for breakfast," Kimani said.
Amended proposals
President Ruto was forced to lead his Kenya Kwanza MPs for a session at State House, Nairobi, that saw the government drop some of the controversial tax proposals.
Some of the amendments include the removal of the proposed 16 per cent VAT on bread, transportation of sugar, financial services, and foreign exchange transactions as well as the 2.5pc Motor Vehicle Tax.
The administration also put on hold proposals to increase mobile money transfer fees and remove Excise Duty on vegetable oil.
“Levies on the Housing Fund and the proposed one on Social Health Insurance will not attract income tax, putting much more money in the pockets of employees,” said President Ruto after the parliamentary group meeting.
The Ruto administration also reviewed the proposed Eco Levy to be imposed only on imported finished products and exempted locally manufactured products, including sanitary towels, diapers, phones, computers, tyres and motorcycles from the levy.
The threshold for VAT registration was also increased to Sh8 million from Sh5 million which shielded small businesses from VAT registration.
Additionally, the electronic invoicing ETIMS introduced by the Kenya Revenue Authority was rescinded from farmers and small businesses with a turnover of below Sh1 million.
The government also imposed excise duty on imported table eggs, onions and potatoes to protect local farmers.