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Ruto summons 'friendly MPs' for meeting ahead of Finance Bill debate

Politics
Treasury CS Njuguna Ndungu reads the Budget Estimates 2024–25 at the Parliament Buildings, Nairobi June 13, 2024 [Elvis Ogina, Standard]

President William Ruto has convened a “friendly MPs” parliamentary group (PG) meeting to garner support for the contentious Sh4 trillion budget, amidst mounting opposition to the Finance Bill 2024.

The move comes as leaders from various political parties, professionals, the private sector, and civil society voice strong opposition to the Bill citing its punitive nature, in case it will be passed without amendments.

Leaders who spoke to The Standard revealed that MPs invited to the meeting include those from the ruling coalition (Kenya Kwanza), opposition members referred to as Azimio rebels, and independent MPs who have been working with the Ruto administration, supporting the Kenya Kwanza agenda.

The meeting, originally scheduled for 7th of this month, faced multiple postponements, first to today (17th) and subsequently to tomorrow (Tuesday 18th). The reason for postponement was to allow the parliamentary budget committee adequate time to finalise the budget process and conduct the first reading.

A number of UDA MPs contacted by The Standard declined to comment on the matter, expressing a dilemma where they are torn between “impressing President Ruto by supporting the Finance Bill or impressing Kenyans by seeking amendments to it.”

When contacted, Budget Committee Chair Kiharu MP Ndindi Nyoro on Sunday referred us to Kikuyu MP Kimani Ichungwa and Senate Majority leader Aaron Kipkirui Cheruiyot.

However, speaking in Yatta last week, Nyoro defended the tax proposals in the Bill arguing that the budget is designed to enhance the lives of Kenyans.

“We have made this budget with Babu Owino (Embakasi East MP) and others, who sit in that committee. We have put more money where Kenyans are,” Nyoro stated.

President Ruto’s strategy to secure MPs support follows Thursday’s presentation of the Budget Statement before the House starts debating it this week.

The Finance Bill 2024 is also expected in the House for reading. If the Bill passes through House stages it will be signed into law by the President.

Among controversial tax proposals that are under scrutiny are a 1.5 per cent salary deduction from employees, matched by employers, to fund the National Housing Development Fund. There is also the proposed increase of VAT on fuel to 16 per cent, potentially raising retail costs and triggering inflation.

A new 15 per cent withholding tax on digital content creators aims to broaden the tax base but may hinder digital economy growth.

Additionally, a three per cent tax on cryptocurrency and non-fungible token (NFT) transfers faces opposition.

The Bill also proposes to increase income tax for top earners to 35 per cent.

The opposition, private sector entities, professionals, civil society groups, and religious organisations have vehemently opposed the Bill, labelling it punitive with protests being held around Parliament last week.

Kitutu Chache South MP Antony Kibagendi told The Standard on Sunday that he did not receive the invite to the parliamentary group meeting, attributing it to his stance against President Ruto’s leadership.

“I did not receive it, but my colleagues did. The invite was sent to Members of Parliament who were considered friendly because they support the Kenya Kwanza agenda,” Kibagendi said, adding, “Even UDA MPs have come out to comment on this Bill because they know it is bad and they have told us in WhatsApp groups.”

He criticised the Ruto administration for proposing tax hikes amidst ongoing corruption and frequent presidential travel.“You cannot raise taxes when funds are being stolen, and you are travelling more than anyone in this world, wasting more funds.

Kibagendi has joined opposition MPs to demand the withdrawal of new taxes and suggested that the Bill be discussed afresh. “Kenyans are in a bad place, with the government just borrowing and increasing taxes,” he said.

ODM Secretary-General Edwin Sifuna said all ODM MPs have been instructed to oppose the Bill until amendments are made to serve Kenyan’s interests.

Sifuna lambasted the budget presented by Treasury Cabinet Secretary Njuguna Ndung’u, arguing it does not address persistent budget deficit, leading to excessive borrowing and heavy taxation.

“We have already issued instructions to our members that we will not be part of this mess — stealing and robbing from Kenyans,” Sifuna said.

ODM wants its MPs to be present in the House for the entire duration of consideration of the Finance Bill 2024, including its official tabling and voting on the Bill, said Sifuna.

“We requested our MPs to suspend any other engagements that would otherwise see them out of Nairobi during this critical period. Those who go against this call the party, its members, and the voters, we will deal with them. They know the consequences,” Sifuna said.

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