Jubilee MPs issue conditions to accept VAT proposals

President Uhuru Kenyatta (fourth from left) attends the Jubilee Parliamentary Group meeting at State House, Nairobi, on September 18, 2018. PHOTO | SAMUEL MIRING'U

What you need to know:

  • Both Jubilee and Nasa coalitions held Parliamentary Group meetings to encourage the MPs to support the austerity measures announced by the President.
  • The MPs are united against the taxes on sugar and confectioneries, with Kipkelion East MP Joseph Limo arguing that it will make the country's products uncompetitive in the region.

Jubilee Party MPs on Tuesday told President Uhuru Kenyatta that they were ready to endorse his reservations on the Finance Bill, 2018, but only if he does not subject allocations to the National Government-Constituency Development Fund (NGCDF) to austerity measures.

The Nation has learnt that MPs were adamant that that was the only way they would support his memorandum.

“All they wanted from the President was the assurance that allocations to CDF are not reduced. In fact, they wanted the allocation increased,” an MP who attended the meeting but requested anonymity for fear of reprimanded by his colleagues told the Nation on Wednesday.

“They are using CDF to blackmail the President,” the MP added.

The kitty has been allocated Sh35 billion in the 2018/19 financial year, but the President last week proposed a Sh5 billion cut, which the government did not mention during the heated meeting at State House on Tuesday.

SUGAR

The supplementary financial estimates tabled in the House by Majority Leader Aden Duale on the same day shows that the allocations to CDF had not been touched.

Meanwhile, it has emerged that MPs have resolved to marshal the numbers to subject the presidential memo to a clause-by-clause amendment to enable them to remove what they consider inappropriate provisions.

Among these are the proposal to halve the VAT on petroleum products to eight percent, and establishing the National Housing Development Fund.

In addition, the MPs are united against the taxes on sugar and confectioneries, with Kipkelion East MP Joseph Limo arguing that it will make the country's products uncompetitive in the region.

NASA SUPPORT

There was division among the MPs, though, with some pushing for the rejection of the memo in its entirety while the others support some of the clauses.

But the proposal to introduce the levy on fuel is the one on which the government and opposition MPs agree, and have vowed to reject.

On Wednesday, Saboti MP Caleb Amisi, who has been picked to lead the group pushing for the memo's rejection, insisted that they are still on course.

Both Jubilee and Nasa coalitions held Parliamentary Group meetings to encourage the MPs to support the austerity measures announced by the President.

While the President is said to have read the riot act to his troops in the House, Nasa, under the leadership of Mr Raila Odinga, agreed to support the proposed introduction of eight per cent VAT on fuel, but with the condition that it must deferred for a year.

The MPs meet this morning to debate and vote for the memo while and also consider spending cuts to raise Sh55 billion to fill the deficit occasioned by the halving of the VAT on petroleum products.