Parliament says it saved Kenyans from excessive taxes by passing 2018 Finance Act

Activist Okiya Omtatah with Lawyer Chacha Odera representing the Attorney general (left) during the hearing of a case on the Finance act 2018. [David Gichuru/Standard]
Parliament yesterday urged the High Court to dismiss a case challenging the legality of new taxes introduced in the Finance Act 2018.

In its reply to activist Okiya Omtatah’s case, the National Assembly claimed it would be forced to revert to the old Finance law in the event the court stops the standing.

Justice Wilfrda Okwany heard that Kenyans would pay a 16 per cent fuel levy instead of eight per cent in the event the court agrees with the activist.

Negative effect

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Through lawyer Wangechi Thanji, the House argued that by passing the recommendations made by President Uhuru Kenyatta, it had saved Kenyans from paying excessive taxes.

“If orders are issued against the Finance Act, 2018, the country will revert to the Value Added Tax of 2013 in addition to the other Acts of Parliament that were amended by the Finance Act of 2018. That includes VAT on petroleum products at 16 per cent,” Ms Thanji argued.

According to Parliament, it passed legislation that did away with 30 per cent tax paid by manufacturers on electricity tariffs.

The House also claimed it had zero-rated maize flour.

“If the orders are issued and these measures are stayed, this shall have a negative effect on citizens as a whole as maize prices shall rise immediately. The rate of taxation is a policy decision solely within the mandate of the Executive and enacted by Parliament and this honourable court ought to decline to make policy decisions which are solely within the realms of other arms of Government,” she said.

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Parliament also argued that the contested Bill could not be debated by both Houses, as it did not touch on allocation of revenue to the counties.

It also claimed that it independently carried out its duties without the Executive’s interference.

Although Uhuru reduced the petroleum product tax by half, Thanji argued it did not amount to amending the Finance Bill 2018.

She claimed that Uhuru returned the Bill to the National Assembly as it was, then Leader of Majority Aden Duale moved the proposals for amendments, which were referred to the Committee of the Whole House, which then returned it to the House.

Simple minority

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She faulted MPs who acclaimed “nay” saying they ought to have requested for a division to prove that they had met the two-thirds majority to amend the President’s reservations.

Justice Okwany heard that Parliament only required a simple minority to have the reservations while the House required an absolute majority to amend or reject them.

Meanwhile, Attorney General Paul Kihara’s lawyers Chacha Odera and Charles Mutinda had to plead with the court for forgiveness after it emerged that he had written a letter to the judge.

The procedure is that he ought to have written the letter addressing the deputy registrar of the court and also copy the same to Mr Omatah.

However, his deputy, Solicitor General Ken Ogeto, wrote to the judge on Tuesday pleading that she hears him before she could make any ruling on the case.

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Justice Okwany said the action was improper and intended to interfere with her independence. The case continues on October 9.

new taxesFinance Act 2018President Uhuru's proposalsNational AssemblyActivist Okiya Omtatahfinance bill 2018