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Reverse tax cuts, but cushion mwananchi - Mudavadi

BUSINESS
By Jael Mboga | December 24th 2020

As Treasury reverses Covid tax cuts, there should be a plan on cost cutting to cushion mwananchi from the effects of the pandemic.

Amani National Congress leader Musalia Mudavadi on Wednesday night added that with the country not generating enough revenue, it was inevitable to reverse the tax cuts.

Members of the National Assembly yesterday voted for the reversal of Covid-19 tax reliefs in an attempt to fill empty government coffers.

But given the dire economic situation, it is not only the government that is desperate to recover from the havoc wrought onto an already strained economy when Covid-19 struck in March.

Business and households have been hit hard by the pandemic, dimming any hope for a meaningful revenue to be realised in the latest reversal.

Mudavadi, a former Finance minister, said Covid only accelerated the crisis brought forth by an already-struggling economy.

“The debt in our hands is massive,” he said on KTN News.

The plans that may complement the reversed tax cuts to further shield mwananchi, according to Mudavadi, include suspending projects.

“The revenue stream cannot match all projects that have been launched by the government.”

ANC leader Musalia Mudavadi, who said Covid only accelerated the crisis brought forth by an already-struggling economy.

He said Kenya’s case is not unique as the international community is equally struggling in the pandemic and has no extra cash.

“Jubilee made too many commitments such as the dams they wanted to put together, infrastructure and stadia, and all were within a short time frame.”

Part of the solution, Mudavadi says, lies in reducing the heavy Sh8.4 trillion burden and have it rescheduled as well as renegotiating with the countries involved.

“That is the only way to release cash into the economy to spur growth -- renegotiate penalties and interest rates.”

He also cited dealing with corruption and wastage aggressively as well as shifting the economy from consumer based to a productive economy. “We are doing very little on job n wealth creation.”

The former minister for local government also said part of the solution lies in the leaders placed in positions of power.

“Choices matter. We must reflect about the leadership we put in place.”

Musalia Mudavadi, who said choices matter and that Kenyans must reflect about the leadership we put in place.

Commenting on the impeachment of governors, Mudavadi said some counties have a lackluster approach in picking their county heads.

He said also to be blamed are political parties and voters who have no regard for the rule of law.

“Entities involved in picking candidates or making decisions are equally to blame when devolution fails.”

On the removal of Mike Sonko as Nairobi governor, Mudavadi raised questions on decisions by the Senate to go the plenary route during his [Sonko] impeachment and going the committee way in the case of Kirinyaga’s Anne Waiguru who survived the ouster bid.

He said there is a need to improve the rules of procedure so that whichever route is picked can be trusted.

But the governors are not without blemish. Mudavadi said even the roadmap for impeachment and how a governor landed in the situation should inform future decisions on picking county heads.

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