Businessman Jimi Wanjigi opines there are enough indicators that the Kenya Kwanza government is likely to fail in meeting its debt obligations.
Speaking during an interview on KTN news, Wanjigi argued it was improper for the government to punish its citizens by imposing additional taxes to evade a debt repayment crunch.
“They [Government] are borrowing yet they are not raising enough revenue to cover it. This government has decided to deal with raising revenue by squeezing us more, causing us more pain and they will not achieve it,” said Wanjigi.
Wanjigi is now urging President William Ruto to explore alternative measures to deal with debt repayment.
“I propose that we deal with the debt directly. The possible solution is to reschedule the debt through negotiation, default to lead a recovery, or odious to assume that we don’t know about it,” he stated.
The businessman says the government has taken an unpopular agenda by inflicting pain on Kenyan citizens in a bid to solve the debt crisis.
The government has drawn up a Sh3.6 trillion ($26.2 billion) budget for the Financial Year 2023/24 with the proposed new taxes expected to generate Sh289 billion starting July.
The opposition has called for the reinstatement of consumption subsidies on basic commodities and warned that the measures will hit small businesses at the very heart of the economy as well as households struggling to make ends meet in the face of soaring prices and deep-seated poverty.
In the Draft Finance Bill (2023) taxes on earnings by workers and farmers are projected to increase to nearly Sh1.2 trillion from an estimated Sh1 trillion for the current year.
The government also plans to increase income tax from 30 to 35 per cent for all those earning Sh500,000 and above.
Additionally, there is a new compulsory deduction that may force employees and employers to both contribute 3 per cent of their salaries and wage bills into a new Housing Development Fund.