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ODM: Taxation, cost of living and insecurity too high for Kenyans

By Standard Team | July 10th 2016

Orange Democratic Movement (ODM) wants Government to cushion Kenyans against effects of high taxation; insisting that levies have led to high cost of living and insecurity.

“Since 2014, we have raised alarm over the direction that our country is taking; in particular, the escalating cost of living and the rising insecurity. Since then, these issues have gone from bad to worse,” said ODM chairman John Mbadi in a press statement.

Because of enhanced Road Maintenance Levy, prices of petrol, diesel and paraffin are going up because the Government has increased levy by up to 50 per cent. The reason for the adjustment is purportedly to raise fuel levy funds from about Sh40 billion per annum to Sh60 billion for road maintenance.

This is despite the fact that the current collection of about Sh40 billion has not been properly utilized by the Kenya Roads Board. Especially roads in rural areas are currently not maintained at all even with the huge collection.

Effects of the increased prices of petroleum products include the following:

1.            It will have direct effect on transport prices. From next week, public service vehicles will most certainly raise fare. This will worsen life for low income earners, the jobless and small traders.

2.            The price of paraffin will certainly rise. This will hit hard the rural and urban poor who rely on paraffin for domestic use.

3.            Increase in prices of diesel will not only increase the cost of transportation but also manufacturing of most products. As at now, many manufacturing enterprises rely on diesel generators because of frequent power outages and expensive electricity.

4.            Increase in diesel costs will also raise the cost of farming with direct consequence on prices of unga and other cereals.

“The sum total of all these is that the cost of living, which is already too high, will get higher. The prices of all consumer products will rise.”

Mbadi says the current increase expected from Thursday is not all as the worst is yet to come. From October, prices of petroleum products will certainly rise again.

This will be the result of the VAT levy introduced in the 2014/2015 Financial Year but was suspended for two years. It will take effect from October 2016. This will have the effect of further increasing the cost of petrol, diesel, paraffin and, in the end, the price of everything.

“As a party, we wish to tell President Uhuru Kenyatta and the Jubilee administration that Kenyans have had enough. We have been taxed enough. Kenyans cannot take any more taxation. The belt cannot be adjusted and tightened anymore.”

ODM is calling on the government to release a plan for cushioning Kenyans against the effects of these taxes. The tax and steal policy which Jubilee is employing has failed.

“We call upon the government to concentrate on prudently using what is available to it now instead of subjecting Kenyans to more taxation which will only provide more money to be stolen.”

The government must address the issue of corruption both at the revenue collection point and at the expenditure side which has rendered the appetite for more money by the government senseless.

“Jubilee needs to realize that its problem is not that it has less money. It is that it is stealing too much of what it collects. The solution is not to tax Kenyans more but to stop theft of public resources.”

ODM note with concern that in about 3 ½ years that Jubilee has been in power, Kenya has seen unprecedented introduction of new taxes and even increase in existing ones. Fuel Levy, exercise duty, VAT on most basic commodities, Railway Development Levy, Capital Gains Tax, rental income tax, among others have all gone up or come in under Jubilee.

This taxation is despite huge appetite for borrowing both domestically and externally but whose impact remains a mirage. Kenyans cannot take more taxes.

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