Parliament must not allow taxation cruelty


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The National Treasury should be stopped from inflicting more pain on Kenyans.

This is the time to support the citizens to navigate the miseries caused by coronavirus and not push them to the wall.

The latest proposal to review tax laws is an attempt at clawing back the relief given to citizens in the past few weeks to enable them to cope with the negative impact of Covid-19.

The Tax Laws (Amendment) Bill, 2020 will culminate in higher costs for the citizens and substantially eat into their incomes.

In effect, the government wants to take back with the left hand what it gave to the public with the right hand.

Precisely, the amendments introduced by Treasury Cabinet Secretary Ukur Yatani and tabled in Parliament seek to lift exemptions on key products and services and introduce tax on liquefied petroleum gas and bonuses paid to low-income earners.


In March, President Uhuru Kenyatta announced a set of tax relief measures to insulate the citizens from the economic pains of the pandemic.

In the package, low-income earners — those receiving a salary of Sh24,000 and below — were exempted from paying taxes while Pay As You Earn (income tax) was reduced from 30 per cent to 25 per cent.

Value Added Tax (VAT) was also cut from 16 per cent to 14 per cent. Cumulatively, these were intended to release more cash into the pockets of the citizens.

Since the government announced a set of restrictions two months ago to contain the spread of the virus, the economy has taken a thorough beating.

Productivity has plummeted and, conversely, employers have resorted to drastic actions, such as retrenchment and pay cuts, which have pushed thousands of Kenyans to economic anguish.

Millions of people engaged in informal jobs and businesses have lost their means of income and have been forced into the vagaries of joblessness.

This is the reason President Kenyatta introduced the mitigation measures to make life bearable. Soon thereafter, Mr Yatani announced that the tax waivers would create a Sh172 billion budget deficit.

But hardly had the citizens settled to enjoy the perks than the National Treasury came up with a surprise proposal to introduce other taxes through an amendment of the law.

For the ministry, the target is to collect some Sh128 billion through the proposed new taxes. Clearly, Mr Yatani’s intention is to raise cash to plug the budget deficit. But that negates the whole objective of the presidential tax waivers.

This is why we ask Parliament to reject the proposed taxes in totality and save the public from further financial distress.

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