Raila, Ruto renew battle over taxation, cost of living

Azimio leader Raila Odinga speaks at Bukhungu Stadium in Kakamega on January 1, 2024. [Benjamin Sakwa, Standard]

Azimio leader Raila Odinga has continued to pile pressure on President William Ruto to review the tax regime and lower the cost of living.

Speaking at Bukhungu Stadium in Kakamega town barely a day after the president took a swipe at the opposition for pushing the government to lower the cost of living, Raila argued that Kenyans were suffering over the punitive taxes amid the economic downturn.

"The government has come up with bad policies that need heavy financing through over-taxation of Kenyans," said Raila.

“The purchasing power of common mwananchi has reduced, hence Kenyans cannot afford basic commodities,” he added.

On Monday, Raila was categorical that if the government does not heed the 'voice of Kenyans' to lower the cost of living, then demonstrations will resume.

But in his New Year speech, President Ruto defended the Kenya Kwanza government's decision to increase taxes faulting the opposition for threatening to return to the streets.

He said that 'war in Europe, rising interest rates in America and unfortunate effects of climate change' is to blame for the skyrocketing cost of living.

"Rising interest rates of the dollar in America and the unfortunate  effects of climate change that occasioned the most severe drought in 40 years.  All these factors slowed down our economy performance, resulting in increased commodity prices," he said.

The president admitted that his government has been compelled to make unfriendly measures to ensure the country remains afloat economically.

"To manage, moderate and overcome these difficulties, we collectively summoned the courage to make decisive and far reaching long term decisions to put the country on the path of attaining socio-economic potential," he said

"The choices we've made over the last year were neither easy, populist, nor convenient: they were however meaningful, appropriate and necessary. In the short term painful but in the long term gainful," he added.

Cotu Secretary General Francis Atwoli while speaking at his Khwisero home on New Year Eve also urged the opposition to reconsider the planned mass protests and challenged them to instead assist the government to make the lives of Kenyans better.

“If you are on strike and demonstrations the question is who are you accusing, the government, the employer, or taxation, taxation is a global thing we have countries that are taxing more highly than Kenya. We are calling on the opposition to come up with their paper and model on how they think the economy can be improved but not picketing," argued Atwoli.

The opposition chief said there is an urgent need for the government to make the cost of basic goods more affordable to all Kenyans.

Raila wants the government to revert the 16 per cent tax on petroleum products to 8 per cent, scrap the housing levy and shelve the Social Health Insurance Fund.

“We have ushered in a New Year' at a time when many Kenyan families are struggling to make ends meet, the prices of basic commodities has reached unprecedented levels, and it is our duty as citizens to demand change," he said.

The opposition leader claimed that the government has an 'I don't care attitude' on the plight of Kenyans as shown by the decision to increase taxes.  "You cannot spur economic growth through excessive taxation," he argued.

The former premier attended Kakamega Governor Fernandes Barasa Cup finals at Bukhungu Stadium barely a week after he attended another grassroots football tournament at Khwisero in the county.

He was accompanied by ODM Deputy party leader Wycliffe Oparanya, Vihiga Governor Wilber Ottichilo, and Vihiga Senator Godfrey Osotsi. Others were MPs Peter Nabulindo (Matungu), Jack Wamboka (Bumula) and Johnson Naicca (Mumias West).

Ruto has maintained that the economy is on the path to recovery and the country has triumphed over the threat of economic stagnation and is now in secure space with regard to sovereign debt obligations.

"Inflation has reduced to 6.8 per cent and our GDP is growing at the rate of 5.4 per cent, placing Kenya as the 29th fastest-growing economy globally," he said.

The president emphasized that the government has deliberately redirected focus to support production through incentives in crops, livestock, and fisheries programs.

He noted that through these interventions the country has increased food production by 40 per cent and plans are underway to reduce Sh500 billion food import bill to zero.

"Our collective efforts have not only rescued us from economic paralysis, but propelled us towards
a brighter future. We navigated complex debt situations, accelerated economic progress, and invested significantly in our human capital," he said.

On healthcare, the President said our Universal Health Coverage program has set in motion a transformative approach to healthcare delivery.

"In the new year, we continue our healthcare transformation at the secondary and tertiary levels of care, emphasizing the need for a fair contribution system for social health insurance, as the previous setup disproportionately burdened and alienated low-income earners from accessing health care, he said.