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MPs halt tax reliefs on a day of U-turns and discoveries

By Brian Otieno | December 27th 2020 at 00:00:00 GMT +0300

It’s the season of giving, but MPs have been taking. On Tuesday, they cut short their holidays to withdraw tax breaks put in place to cushion Kenyans during the pandemic period.

It was a day of U-turns and discoveries. In April, at the height of Covid-19 restrictions, waheshimiwa hailed the president as being wiser than Solomon in his proposal to reduce taxes.

They passed the new measures excitedly, convinced that they were what Kenyans needed to get through the tough times. One or two members had opposed the reliefs as bad for the economy.

Less than a year into the new tax regime, the MPs discovered that the reliefs had done more harm than good. All who rose to speak in Bunge had a revelation that the Covid breaks hadn’t helped mwananchi one bit.

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For starters, the income tax reductions had done zero to cushion Kenyans as, the MPs found out late, many citizens were unemployed. It turns out that they thought everyone had jobs when they voted for the new taxes, only for reality to strike hard.

Earlier, it had seemed that Kiminini MP Chris Wamalwa would oppose the tax reversal when he said Kenyans, in fact, needed more cushioning as they were still in dire straits.

But he was only setting the day’s theme, delivering the first U-turn by supporting the move in the end. Before he did, however, Wamalwa blamed corruption for the country’s economic troubles. Another late discovery.

Then there was the reduction of value added tax (VAT) from 16 per cent to 14 per cent. The two per cent cut had not led to lower commodity prices, MPs came to learn.

Ichung’wa about-turn

Kikuyu’s Kimani Ichung’wa had foreseen the futility of slashing VAT and warned of the same months ago. You would think he would be the most thrilled to have that mistake corrected but, as if to upstage Wamalwa, he had a U-turn of his own and opposed the new changes.

Going back to the old taxes, he argued, would increase the prices of commodities. Unsurprisingly, he changed his mind again and supported the increments.

Homa Bay MP Peter Kaluma had also opposed cutting VAT in April, but, unlike Ichung’wa, Kaluma stood his ground and even gloated over the failed tax measures.

He urged his colleagues to right their wrongs, flattering them as the country’s “true north”. Never mind that they have actively participated in dipping the country’s economy south by enabling the Executive’s begging addiction.

Everyone agreed that the taxes had to go. It didn’t matter that they had helped those who had suffered pay cuts through the economic downturn.

In his pitch for the new laws, former Majority Leader Aden Duale argued that the economy was comatose. Increasing taxes, he said, would take the nation out of ICU and into HDU. It was either that or borrowing, Duale went on.

But that was a lie. Treasury Cabinet Secretary Ukur Yatani has insisted that we would still have to borrow, which, in the end, means more taxes and more debt.

As expected, MPs passed the laws hastily, heckling down any delayer. And Endebess MP Robert Pukose frequently rose to rush the process, perhaps eager to go home for the holiday season.

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