The Ayes have it! MPs authorise Uhuru to tax Kenyans more

President Uhuru Kenyatta during his address to the nation on September 14, 2018. Photo/PSCU
President Uhuru Kenyatta during his address to the nation on September 14, 2018. Photo/PSCU

All of President Uhuru Kenyatta’s proposals to the Finance Bill, 2018 were on Thursday passed by the National Assembly amid acrimony, high drama, chanting and defiant songs.

In a memorandum outlining his reservations after rejecting the Finance Bill, 2018, President Kenyatta recommended that the proposed 16 per cent VAT on petroleum products be reduced to 8 per cent even as he suggested other controversial tax measures to raise more revenue.

Following the passing of the Bill to reflect the President’s recommendations, mobile phone subscribers are set to pay more for airtime and data services as the excise duty on airtime will be increased from 10 per cent to 15 per cent.

The cost of mobile money transfer services is also expected to rise after President Kenyatta proposed the excise duty on mobile money transfers be increased from 10 per cent to 20 per cent.

Salaried employees are also in for tougher times as President Kenyatta’s memorandum, which carried the day, contained a proposal to have workers contribute 1.5 per cent of their earnings to the National Housing Development Fund. This money will be channeled towards financing one of President Kenyatta’s key development agenda on affordable housing.

The cost of internet is also expected to rise as internet bundles will now be hit with an excise tax of 20 per cent.

The President had also proposed to double the tax on cost of bank charges like ATM, account fees and over-the-counter withdrawals from 10 percent to 20 percent.

Kerosene users will also feel the pinch of the Finance Bill, 2018 as President Kenyatta recommended a special ‘anti-adulteration’ tax of Ksh.18 per litre be imposed on Kerosene importers.

Confectioneries including sweets, juices and chocolates will now be subjected to an excise duty of Ksh.20 per kilo.

The first round of voting on the president’s memorandum was characterised by high voltage drama after a section of MPs opposing the fuel levy failed to raise the required quorum of 233 members to shoot down the proposed tax measures.

Ruaraka MP TJ Kajwang accused National Assembly Majority Leader Aden Duale of leading a section of MPs  in walking out of the chambers to frustrate attempts to veto President Kenyatta’s tax proposals.

At some point, MPs opposing the Bill stormed out after Speaker Muturi ruled that those opposed to the President’s proposal on 8% VAT on petroleum products didn’t have the required numbers.

The Committee of the whole House led by the Speaker then proceeded to pass the other proposals in the President’s memorandum in an acclamation vote.

The president’s memorandum carried the day after MPs opposing the new proposals failed to raise the requisite 233 member-quorum to shoot down the tax recommendations.

The Bill will now be transmitted back to the President for assent into law.

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Story By Benjamin Muriuki
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