We did not read whole Finance Act, MPs confess to angry farmers

The very MPs who unanimously passed the Finance Act are now on the receiving end since the law is on the verge of bringing the avocado sub-sector to its knees. [File, Standard]

What started as mere political tact and a show of might between the Opposition and the government has come back to haunt the Kenya Kwanza administration; the Finance Act 2023.

The Act was President William Ruto’s first law as president to guide his government’s collection of monies to aid his plans and he campaigned for it with zeal, pushing every Kenya Kwanza-allied MP to support it.

The president warned against opposing the Bill when it is tabled before the House. “We need to pass this Bill so Kenya can develop. There are some suggestions that MPs should disclose how they voted when the Bill is tabled in Parliament, but personally, I am waiting to see any MP who will shut down that Bill,” he said.

A week later, Ruto’s request was accomplished as at least 184 MPs—mostly from Kenya Kwanza—supported the Bill, while 88 MPs—mostly from Azimio—opposed the amendment.

Out of the 184 MPs who approved the Bill, which was later assented into law in June 26 last year, only Githunguri MP Gathoni Wamuchomba dared the President by rejecting the Bill, describing it as “punitive, oppressive and scandalous”.

Eight months later, the very MPs who unanimously passed the Act are now on the receiving end since the law is on the verge of bringing the avocado sub-sector to its knees.

While many have claimed they were not aware of the provision of the contentious Section 23 of the Finance Act, others have tried defending the provision by claiming they did not envisage a situation where the law would be used to tax farmers.

On Tuesday, at Deputy President Rigathi Gachagua’s official residence, legislators who attended a stakeholders meeting, included Mary Waithira Wamaua (Maragua) Joseph Munyoro (Kigumo) Chege Njuguna (Kandara) Edward Muriu (Gatanga) and John Mutunga (Tigania West), faced the electorates’ wrath.

Ms Wamaua’s remarks claiming MPs were not in a position to go through the entire legislation did not satisfy growers on their justification to pass the Bill. “To those asking why Kenya Kwanza MPs passed the Finance Act without noticing and removing some proposed taxes such as the new avocado tax, the Finance Bill is a big document to know every nitty gritty. Ask pastors who have a Bible by their side every day; they can’t know all the verses in the Bible,” said the second-term MP.

The MP, who was among leaders who approved the Bill last year, said she was opposed to taxation of primary producers in agriculture. She wondered whether other sectors such as fish, maize and pastoralists were affected, claiming the requirement seemed to touch on different crops in Mt Kenya region.

During debate on the Bill, nominated MP John Mbadi said all the 184 clauses were harmful to the downtrodden and should be rejected.

“Amendment to income tax is harmful. The increment of Turnover Tax means that if someone’s total sales per day is Sh1,370 he will qualify to be taxed. These are the ordinary mama mboga and boda boda riders and you want them to part with three per cent up from one percent, which was there in Uhuru’s administration,” Mr Mbadi said.

But tyranny of numbers as opposed to scrutiny of the Bill became the order of the day with the government-allied MPs demanding that the Speaker pose the question as opposed to wasting time. They adhered to Ruto’s directive and passed the Bill.

Mr Muriu on Tuesday said the legislators had attended the forum “to know where the rains started beating us” and that while the requirement was meant to rope farmers into the system, its implications could not be underestimated.

“There is nowhere in the world where agriculture is subjected to taxation. Instead, countries subsidize agriculture. The section is an omnibus which should be amended to exempt players in agriculture so that taxation is only done when one does value additions or in the export,” he said.

In a veiled attack against the MPs, Kirinyaga Senator Kamau Murango read the MPs a Bible verse from Isaiah that condemns lawmakers for unjust laws.

“Pastors are now fond of reading Isaiah 10:1-2 which says, ‘woe to those who make unjust laws, to those who issue oppressive decrees, to deprive the poor of their rights and withhold justice from the oppressed of my people, making widows their prey and robbing the fatherless’,” the senator said.

He said it was an absurdity to tax the avocado sub-sector that the government has invested little in, comparing it to milking a cow one never fed.

Farmers at the meeting demanded that MPs involve stakeholders in making policy and take time before passing laws.

“You can’t come here and tell us you did not read the Finance Act because it’s a big document. We know you can seek more time to read and comprehend the Bill before approving it,” said Hassan Kamau, a farmer.

Sharon Wanjiku, an aggregator, told the legislators that failure to involve stakeholders in the lawmaking process was to blame for the passage of policies that aimed at clawing back gains made in the avocado sector.

Deputy President Rigathi Gachagua likened the Finance Act to an exam “where one gets 70 per cent but of course there are corrections to be made, which a teacher goes pointing out in red”.