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Weekly Newsletter - Issue No 202
3 September - 9 September, 2018

Editorial

Dear MPs, please stop with the crocodile tears, you had enough time to deal with the VAT Act

Politicians have a penchant for speaking from both sides of their mouth. And as National Assembly Majority Leader, Aden Duale put it in a recent interview with the local media; our MPs are being hypocritical over their sudden rage over the implementation of the 16% VAT on basic commodities.

To begin with, the Finance Bill, 2013 that was signed into law by President Uhuru in 2013 amended a number of laws relating to various taxes and duties among them being the Value Added Tax (VAT) Act that has been the center of the storm the last few days. Although the VAT on petroleum is attracting more attention, other goods also affected include: fertilizers, textbooks, milk, newspapers among other products.

These amendments that introduced 16% VAT on products that were previously exempted from consumption tax was as a result of the government’s ceding ground to the International Monetary Fund (IMF) demands. The reason for this demand by IMF was to reduce the fiscal imbalance; that is, the government’s future debt obligations at the time were projected to be different from its future sources of revenue.

Our Members of Parliament rather than scrutinize the Finance Act, 2013 and its implications on the expected implementation of the VAT Act and conclusively debate the matter, chose to suspend its operationalization until 2016. And when the 2016 implementation deadline approached, MPs once again suspended that implementation of the 16% VAT on petroleum products for two years; meaning the Act would come into effect on September 2018.

Consequently, as the 2018 deadline approached, the MPs, once again, through the Finance Bill, 2018 unanimously voted to postpone its implementation for another two years. Only this time, Treasury has gone ahead to implement the Act and hence the sudden outcry. And while we are having MPs shouting themselves hoarse over the Executive’s decision to overlook their recommendations on the matter, it’s not lost on Kenyans that they had sufficient time – 5years to be precise – to deal accordingly with the matter but chose to play party politics instead.

When defending the changes in the VAT Act, the Deputy President, William Ruto indicated that it was necessary for generating revenue for the nation’s development agenda. Indeed since the start of President Uhuru and his Deputy Ruto’s government in 2013, they’ve carried out multi-billion projects that have seen an increased borrowing by the government to satisfy these projects; despite the constant warning by IMF that the continued appetite for borrowing was going to be unmanageable.

News of the Week

Treasury CS defies MPs implements 16% VAT

Treasury CS, Henry Rotich implemented the 16 per cent VAT on petroleum products that will see pump prices for petrol and diesel and Kerosene go up by 10%  and 12% respectively. This decision puts the Executive at crossroads with the Legislature after MPs unanimously voted to postpone the implementation of the 16% VAT until September 2020. 
 

You want to check what your MP has been up to? We have a searchable Hansard on our site

The uproar by MPs against the implementation of the 16% VAT by Treasury got many wondering how sincere they were considering some of them endorsed the idea in Parliament. A number of Kenyans online were unable to challenge claims by MPs regarding the matter except for a few who went looking for the Hansard. Here's the good news. Our  site has a searchable hansard record that you can use to see what your MP has been saying throughout his term. We also have a lot of other great information for those interested in research.

COTU against increment of NHIF contribution. Terms it reckless

Central Organisation of Trade Union (COTU) boss, Francis Atwoli has faulted Deputy President, William Ruto's proposal to increase monthly contributions to the National Hospital Insurance Fund (NHIF). Atwoli says the remarks were reckless and out of touch with majority poor. COTU boss said Kenyans are the most taxed Africans, yet their taxes are not used prudently by the government. He took issue with the fact that it’s barely 3yrs since the review that saw taxpayers increase their contribution to NHIF.

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Senate resumes session as National Assembly begins recess

The Senate has resumed their session as from 10th September after a month long break. The National Assembly on the other hand begun their recess on August 31st and will resume session on September 24th.

Quote of the Week

"I don’t want to talk about it but even in the senate they would pay because of my condition, it’s not because you want prestige, no, because even business class is prestige already"

Quote by embattled Nairobi County Speaker, Beatrice Elachi when explaining her medical condition that requires she travels first class. This was moments after her impeachment. She said this on September 9, 2018

Lest we forget

"Mr. Temporary Speaker, Sir, I also want to speak about how national funds are spent. For example, even here in Parliament, where we have the Parliamentary Service Commission, there are some Commissioners you will never get in their offices, because they are permanently in the sky. Where do they go?"

Sentiments by West Pokot Governor, Hon. John Lonyangapuo when debating the Division of Revenue Bill as the Senator of West Pokot on May 15, 2014.

Read the Hansard

Newsmaker this Week

Migori Governor, Okoth Obado made headlines this week after a student from Rongo University, Sharon Atieno - an alleged lover to the governor - was found murdered in Kodera Forest. He reportedly admitted to the police that he was in a relationship with the deceased and indeed the baby that also died in the gruesome murder was his. Sharon Atieno was seven months pregnant by the time she met her death. She was reportedly abducted by the governor's personal assistant Michael Oyamo together with a Nation Media Journalist. The Journalist however escaped out of a moving car to free himself. The governor's personal assistant has since been arrested and charged in court but did not take a plea to allow for completion of investigations. Governor Obado has denied any involvement in the murder of Sharon Atieno.

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