Budget: New battlefront for Azimio and Kenya Kwanza

Majority Leader in the National Assembly Kimani Ichungwa, Treasury CS Njuguna Ndung'u, Majority Chief Whip Silvanus Osoro and Kilifi North MP Owen Baya at parliament on June 15, 2023, for the presentation of the 2023/2024 Budget Statement. [Elvis Ogina, Standard] President William Ruto's mission to increase revenue collection through the Finance Bill 2023 might be the starting pistol for the opposition to discredit the government's plan to actualise Kenya's largest budget ever. Moments after the Treasury Cabinet Secretary Njuguna Ndung'u uttered his first words in Parliament on Thursday, June 15, 2023, while reading the 2023/2024 budget estimates, opposition MPs walked out of the chamber in overt rejection of the budget and in extension the Bill. The move by the MPs is part of the opposition's sustained push to reject some of President Ruto's plans to bring about "economic turnaround and inclusive growth." Speaking outside Parliament, Migori Senator Eddy Oketch argued that the government should have invested in reducing expenditure instead of loading the weight or revenue generations on Kenyans already struggling with the rising cost of living. "The government should ensure there is money in the hustler's pocket. Before you tax people, first sort out the income problem," said Oketch. The senator said he foresees a situation where the opposition will not have to call for demonstrations but Kenyans will go to the streets by themselves to challenge the new tax regulations critical for the Kenya Kwanza government to finance its Sh3.67 billion budget. "Once the Bill goes for a third reading, Kenyans will rise and demonstrate. They will not only be Azimio supporters but even those who voted for this government," he said. This came days after Azimio la Umoja-One Kenya leader Raila Odinga called on his supporters to be ready for his signal for another round of mass protests if the Bill passes into law. He hinted that the protests would resume on July 3 and would continue unceasingly. However, Raila clarified that they would officially announce the call for protests after MPs vote on the Bill. Azimio has raised concern over the rising cost of living and the unrelenting push by the government to increase the VAT on fuel, from eight per cent to 16 per cent. Azimio La Umoja-One Kenya Alliance leader Raila Odinga, flanked by other coalition leaders, addressing a press conference at SKM Command Centre in Karen, Nairobi, on 14, 2023, where they rejected Kenya Kwanza's Financial Bill 2023. [Edward Kiplimo, Standard] The opposition is on record calling the Bill a "piece of punishment that Kenyans should be deeply concerned about," and has shown all signs of standing behind the cost of living issue in its opposition to the Ruto administration. In addition to the public disapproval of the housing levy, which now takes the form of a tax, where employees are required to contribute 1.5 per cent of their income, matched by their employers, the opposition is expected to mobilize public resistance on this issue as well. This will be at the centre of the opposition's leverage as it gears to draw its guns and lead the country to demonstrations if the Bill is accented to law. With all signs pointing to a smooth sail of the Finance Bill 2023, the Ruto administration's quest to cut on borrowing and focus on revenue generation will see content creators pay a five per cent tax on payments related to digital content monetisation. In a rapidly emerging sector that primarily provides self-employment opportunities to a large number of young individuals through innovative approaches, the recent revision of the tax rate from 15 per cent has failed to alleviate the discontent felt by many. Content creators strongly believe that this sector serves as a valuable source of employment, where the government and private sector have been unable to deliver satisfactory results. Similarly, the opposition is set to strongly criticise the government's decision to reject proposals made by the Commission on Revenue Allocation to give county governments Sh407 billion in sharable revenue. Counties will now be allocated Sh385 billion in the coming financial year, which is however a Sh15 billion increase from the last financial year's allocation. Governors were pushing to have Sh425 billion allocated to counties. Other areas of contention include the reduction of the export levy from 80 to 50 per cent which manufacturers have said will have negative consequences. Kenya has 13 tanneries that are currently operating at only 30 per cent of their capacity. This is because there is a shortage of raw hides and skins needed for their operations. Manufacturers argue that the reduction in the export levy will lead to the collapse of the tanning sector, resulting in job losses and a decrease in government revenue. With the budget and Finance Bill garnering prominence in public discourse in recent months, all signs point to a perpetual battle in the coming days between the opposition and the government. This unending tussle has in the past been blamed for heightened political temperatures and anxiety among investors. jisrael@standardmedia.co.ke

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