Githae’s claim on tax burden not the truth

Why did Finance minister Njeru Githae have to resort to double-speak when he announced the new tax measures to raise close to Sh40 billion for additional recurrent expenditure?

Simple, he was, in a very crude fashion, playing the politician with a matter he knows will impact heavily on the voter who will decide his fate in the March 4 General Election next year.

Liberalised market

It was nonsense for him to say that mobile phone companies should not load the new 10 per cent tax on money transfers on users. This is because Treasury has no business telling companies how to price their services. Kenya’s is a liberalised economy and companies are in business to make a profit; yes, even the ones that are still making losses.

Once again, as he did when the battle between teachers’ unions and the Ministry of Education was at its height, Githae adopted the role of Pontius Pilate and symbolically “washed his hands” off the whole matter of loading more pain on the ordinary consumer.

This is why the new Constitution envisages separating the role of a Cabinet minister from politics. In the next Government, ministers will have to be technocrats, not politicians looking to cover their backs.

The truth is that Githae’s initial plan to raise income tax was not feasible given that Kenyan workers in the formal sector are already among the most heavily taxed in the world.

Even worse, it has now emerged that Treasury might use some of the tax raised in the new measures to pay the over generous gratuity to MPs of Sh7.38 billion