On Saturday, during the burial of the widow freedom fighter Dedan Kimathi, President William Ruto reiterated his hardline position that the Finance Bill 2023 will be presented to the National Assembly as it is.
The Bill has received heavy condemnation as it overburdens mwananchi. The Bill amends several taxation laws with the goal of increasing collectible revenues for government.
Dr Ruto inherited a government that was heavily dependent on subsidisation, taxation and borrowing. While he has committed towards cutting down on borrowing, this has come at a great cost. The removal of subsidies has seen the lower cadre of society bear the brunt. And now the budget deficit seems to have been passed on to Kenyans.
Sadly, majority of Kenyans are unemployed which means a small portion of the population will bear the greatest burden to fund the hustler government. Civil servants will also have to remit taxes on per diem. State officers earning in the upwards of Sh500,000 will also have to remit 35 per cent income tax. All employees will now be subjected to 3 per cent housing levy.
Dr Ruto campaigned on the “hustler government” theme, a slogan which marshalled numbers enabling him to win the elections. The hustlers are now coming to terms with the meaning of bottom-up economic model, which is all clear now- for hustlers to enjoy government goodies they must fund the same. Unfortunately, for Kenyans this happens when tax is the main government revenue source.
Brace yourself for more taxation and high cost of living. Dr Ruto says government has cut borrowing by Sh500 billion. He has also reiterated plan to invest heavily in production rather than consumption. The most glaring issue with this measure is that the government has administered a single dose by abruptly cutting reliefs such as subsidies. The president is following in the footprints of the Asian Tigers which place emphasis on wealth creation.
It explains why government has heavily invested in agriculture and SMEs. Unfortunately for Kenyans, there is no quick fix for matters economy. They must wait for farmers to harvest for the cost of basic food commodities to go down. Likewise, the ripple effect of Hustler Fund will be felt in years ahead.
Even worse, the Finance Bill has sharpened the tax agency's fangs. Taxpayers will now have to put a security deposit of 20 per cent should they dispute a decision of the Tax Appeals Tribunal. KRA will stop offering tax reliefs. Ruto has demanded a compulsory registration of all adults for purposes of tax payment.
Will he come down? Unlike the repentant biblical Zacchaeus, Dr Ruto is unlikely to come down the sycamore fig tree. He continues to ridicule his predecessor’s economic strategy which encouraged subsidised consumption. Also, his top economic advisors feel Kenyans are paying less taxes compared to their neighbours.
It is likely the 2023 Finance Bill will be passed without amendments although it is clearly against hustlers. The hustlers have no option but to fund this government. After all it is their government. They must sleep on the bed they joyfully made.
-Mr Kipruto is an advocate of the High Court of Kenya