House team seeks to push for fresh relook into Finance Bill

National Treasury CS Njuguna Ndungu when he appeared before the National Assembly Finance and Planning Committee at Hilton Garden Inn on May 29, 2023. [Boniface Okendo, Standard]

The National Assembly Finance and Planning Committee has yielded to public pressure and is now seeking to amend the Finance Bill 2023 to remove seven contentious clauses.

Despite the tough stance taken by President William Ruto and his Deputy Rigathi Gachagua who have been pushing for the proposals in the Bill, the committee led by Molo MP Kimani Kuria has proposed to amend certain clauses which include the hotly contested three per cent housing levy.

The committee, according to some of its members, is seeking to halt the proposal until a legal framework is put in place in bid to establish how funds will be collected and utilised. There have been suggestions that the clause be amended to provide for a graduated introduction of the levy and it be initially pegged at one or two per cent before its fully implemented.

A member of the committee informed The Sunday Standard that they have the goodwill of President Ruto, who he said is also concerned over the public outcry against the Bill at a time when the high cost of living was a major issue in the country.

"We can't go against the wishes of the Head of State who is also our party leader and we have his blessings," the member, who did not wish to be named, said.

Another contentious clause that the committee is proposing for a relook at is the 15 per cent digital levy for content creators, which it wants reduced to five per cent.

"We are also relooking the issue of mandatory payment of withholding tax to KRA within 24 hours with a view of recommending retention of the status quo but with the mandatory 20 per cent deposit of contested tax amount to KRA before lodging an appeal, we are deleting the proposal," said the member.

On the issue of 16 per cent VAT on petroleum products, the committee is seeking to maintain the existing eight per cent deduction.

However, the committee is proposing to increase rent income tax from the current 7.5 per cent to 10 per cent while the zero-rating tax on manufacturing of medicinal products and fertiliser is likely to be retained in the exemption category.

On June 5, President Ruto had dared MPs to go against the government's plan to give their voters employment through the Finance Bill.

"I'm waiting to see the members of Parliament who will vote against the Finance Bill. We are waiting to see them oppose a plan that empowers the youths who voted them to Parliament," the President said in Narok during a thanksgiving prayer service.

Gachagua, on his part, had warned that there would be no roads for MPS who opposed the Bill.

"Some of you leaders are lying to Kenyans, but know that if your MP is opposed to the Finance Bill, they should not ask for roads," he said.

If tabled in the House, the proposals by the MPs would come as a reprieve to a section of Mt Kenya MPs, who are unease with drumming up support for the Bill in grassroots meetings for fear of a backlash from their constituents who are going through tough economic times.

Some MPs are also fearful that opposing the Bill publicly or voting against would expose them to the wrath of President Ruto.

But to some such as Githunguri MP Gathoni Wamuchomba, who had vowed to go against the grain, amending the Bill will a major boost.

"The sovereignty belongs to the people and their wishes must be respected and incorporated in the discourse and budget policy making," she told The Standard on Sunday.

Other government-allied MPs said they did not wish to comment on the matter as they had not read the specific clauses that the committee is seeking to amend or delete.

They included Kiambu Women Rep Ann Muratha, Nominated Senator Veronica Maina and Nominated MP Sabina Chege who said Finance Committee members were the best people to comment on the matter.

National Assembly Budget and Appropriations Committee chairman Ndindi Nyoro, however, said Kenyans' views would be incorporated in the Bill since Ruto is "a consultative and listening President."

The Kiharu MP added that although the Kenya Kwanza government has its aspirations and the things it wants done, it would listen to Kenyans' wishes.

"The public participation has been a very sacrosanct process. We respect the people of Kenya. Their views are to enrich our opinions and to make our Finance Bill better," he said.

Kieni MP Njoroge Wainaina said: "We are happy that the government is listening and has opened channels of communication but we are waiting for the final draft to see what will be amended to be presented to us and support it. Failure to support the Finance Bill is tantamount to staging a civilian coup against the government."

However, Azimio has vowed to continue opposing the Bill, saying it should be discarded into totality.

National Assembly Minority Leader Opiyo Wandayi accused the government of playing with the minds of Kenyans by seeking to amend the Bill, which, he said, contravenes the Constitution.

"The only remedy for that bill is to be withdrawn since there is ample time for the budget process to commence afresh. We need a bill that is responsive to the plight of the people," he told The Standard on Sunday.

Suna East MP Junnet Mohamed noted that the Bill has always been a negotiated in Parliament and anything short of that will be disastrous.

However, EALA MP and UDA Vice Chairman Hassan Omar said: "We must create democratic socialism in this country. We should tax the wealthy to help and uplift the downtrodden. This is even in the Constitution on social justice. What we are talking about is tax justices and not increased taxation because we have reduced tax for the low income earners."

And Nominated Senator Faraj Abdullahi argued: "The proposed housing Levy is not a tax; it is a saving. This is a culture President William Ruto wants to inculcate in Kenya because we have had a poor record in terms of saving."

But Likoni MP Mishi Mboko said: "We are asking him to shelve the plan to increase taxes for two years because, at the moment, the economy is in the ICU. We know we must pay tax to pay debts and fund development projects but now is not the time."

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