Fuel price row exposes MPs for double speak
By Moses Nyamori
| September 22nd 2021
The public uproar triggered by a spike in fuel prices has exposed some Members of Parliament as masters in the art of political doublespeak.
Some of the lawmakers–who in 2018 were in the forefront in the passage of the eight per cent Value Added Tax (VAT), which is partly linked to the high prices–yesterday shifted blame to President Uhuru Kenyatta and the National Treasury.
Garissa Township MP Aden Duale, who served as House Majority Leader at the time, yesterday laid blame at President Kenyatta's door.
Mr Duale was a key cog in a well-orchestrated scheme then to deny the National Assembly the requisite two-thirds majority (233) required to override the President's decision.
There were only 215 MPs in the House when a headcount was conducted during the chaotic session that was characterised by walkouts and claims that some MPs had surrendered their electronic voting cards to further bring down the numbers.
Duale said Uhuru had abused his veto powers to have his way whenever Parliament rejects Government Bills.
“This House rejected the increase and introduction of VAT on petroleum. The President used his powers under Article 115. Uhuru has used it more than any other president–over 35 times. In fact, we need to go to judge Odunga and Ngugi for interpretation on this Article,” said Duale.
He added: “This President is using his powers to make innocent hustlers to suffer and this House cannot sit and wait."
During the passage of the Bill, Duale defended the President by highlighting reasons for his reservation. He stated that the tax would hand the Government revenue to finance its capital projects as well as deliver essential services.
“I want to speak to both the Yes and No camps that we handle the matter in the interests of Kenyans. It is good for the House to know that at 16 per cent, Treasury was to collect Sh35 billion and it was already factored into the budget,” Duale had said.
He noted that Government projects would be hurt should the tax be suspended, before citing other African countries that were charging VAT on petroleum products.
Wajir East MP Rashid Kassim admitted that the House let down the electorate after members failed to turn up to override Uhuru’s reservations.
Mr Kassim blamed the House for failing to challenge the excesses of the Executive on the March 9, 2018, handshake between Uhuru and ODM leader Raila Odinga. He said Uhuru had run roughshod over Parliament due to the unity deal.
“I attribute this problem to MPs and the handshake that allowed Jubilee and ODM to come together and pass the VAT.
“Basically, I blame the handshake for these problems and we have been unable to challenge the Executive and not able to protect the electorate. We should have protected the electorate much earlier,” said Kassim.
But Seme MP James Nyikal said the House could not pass the buck to the Executive, saying that they had the powers to block the VAT increase.
“The buck stops with us. We need 233 members to override the President’s veto and we can manage the numbers,” said Mr Nyikal.
“I am surprised that Duale can say this when all these happened when he was the Leader of the Majority,” he added.
Dagoretti MP Simba Arati shared similar remarks, saying it was surprising that his colleagues had resorted to blaming others for the high cost of fuel.
He said the entire House was to blame for the spike in prices.
“I saw my colleagues say it’s about Tangatanga or Kieleweke. And if it is about blame game, it should be about all of us as a country. The hike in prices has highly damaged the image of Parliament,” said Mr Arati.
The lawmakers made the remarks as pressure continued to mount on them to abolish fuel levies linked to the current high pump prices.
The House was yesterday inundated with petitions seeking to have the VAT on petroleum products scrapped with majority of lawmakers backing the latest push triggered by an all-time increase in fuel prices.
There was overwhelming concurrence by lawmakers for the House to scrutinise the numerous levies charged on fuel before proceeding to abolish some of them to cushion taxpayers.
The National Treasury came under sharp criticism from members for "resorting to overtax Kenyans through fuel after failing to meet revenue targets."
The Energy and Petroleum Regulatory Authority (EPRA) last week increased the price of petrol to Sh135 per litre.
A breakdown of the price for petrol shows that total taxes and levies stand at Sh58.81 with excise duty taking Sh29.50, road maintenance levy (Sh18), petroleum development levy (Sh5.40) and petroleum regulatory levy (Sh0.25).
Other levies are railway development levy (Sh1.16), merchant shipping levy (Sh0.03), import declaration fee (Sh2.04) and value-added tax at Sh9.98.
Petitioners Antony Manyara and John Wangai yesterday sought the intervention of the House to scrap VAT to bring down costs. Another petition was tabled by Matungulu MP Stephen Mule.
There were additional adjournment motions by Arati and Wilson Sossion (nominated) for the House to discuss the matter.
National Assembly Speaker Justin Muturi directed that the matter be committed to the Departmental Committee on Finance and National Planning for consideration.
Muturi instructed the committee chaired by Homa Bay Woman Rep Gladys Wanga to prepare a report and table it before the House within 14 days.
The committee is further expected to attach a draft Bill to the report proposing legislative interventions to cushion taxpayers.
But Kimunya and his Minority counterpart John Mbadi said the increase in fuel prices was not entirely because of VAT. The two said that prices have been influenced largely by global market demands.
Kimunya said that scrapping VAT and other levies on petroleum products would occasion a budget deficit and make the government fail to finance road repairs.
He added that that at least Sh29 billion would be lost if VAT was to be abolished. He further said that scraping the Road Maintenance Levy would occasion reduced allocation to the Roads Board.
“I want the committee also to look at the road programme. If we are making adjustments, the Roads Board will receive less and the constituencies will also receive less for road maintenance.
“We will have the option of driving on well-maintained roads using expensive fuel or have cheap fuel but drive on poorly maintained roads,” he told the House.
Kimunya said the current spike in prices was a result of a "cocktail of factors", including a weakened shilling and increased global demand for fuel.
Mbadi said the current rise could not be attributed entirely to VAT. He argued that the tax was introduced three years ago and prices have been relatively fair.
“The committee has to find out and explain the recent rise because VAT has been there since 2018,” said Mbadi.
But the petitioners decried the passage of Section 13 of the Finance Act, 2018 that introduced the eight per cent VAT on petroleum and petroleum products, which had previously been tax-exempt.
They argued that taxpayers and consumers of petroleum and petroleum products have been adversely impacted by the law, which they termed as draconian.
"The petitioners seek the intervention of this House to consider repealing Section 13 of the Finance Act, 2018, in order to address the sharp increase in prices of petroleum and petroleum products through abolition of the currently prescribed eight per cent value-added tax,” said Muturi.
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