Raila Odinga, the leader of the Azimio la Umoja One Kenya Coalition Party, on Thursday, outlined what he described as his “final objection” to President William Ruto’s revenue-raising strategies included in the Finance Bill 2023, threatening widespread unrest if he succeeded in pushing the bill through the National Assembly.
Speaking to reporters on Thursday at the Jaramogi Oginga Odinga Foundation in Nairobi, Mr. Odinga claimed that opposition MPs had been told to vote against it completely.
The Finance Bill was criticised by Mr. Odinga as a “disease that cannot be cured with common herbs” at the Azimio Economic Council, which was presided over by the former governor of Laikipia, Ndiritu Muriithi.
“This bill is economic sabotage. If Ruto insists on this bill, this country will go into full recession. This bill requires and must get fierce resistance,” the Orange Democratic Movement (ODM) leader charged.
He argued that no rational leader would stop providing subsidies for necessities while simultaneously raising taxes on those same commodities and the wages of workers, including street vendors.
In addition, Mr. Odinga mentioned increased deductions from the National Hospital Insurance Fund (NHIF) and the National Social Security Fund (NSSF), the housing levy, higher business turnover taxes, taxes on content creators and social media influencers, a 31% increase in the tax rate on cosmetics, a 16% VAT on basic commodities like maize, and a twofold increase in the VAT tax on fuel.
He also took issue with the proposals in the bill to expose pharmaceuticals and medicaments to taxation by removing them from zero-rated to tax-exempt status, imposing an advance tax on motor vehicles, introducing a 16 percent VAT on insurance compensation, and imposing a 30 percent income tax on per diems.
He forewarned that the Housing Fund tax would raise operating costs for businesses and force them to move.
He questioned the President’s decision to abolish the VAT on airplanes and helicopters while simultaneously advocating higher taxes for small businesses and chama organisations.
“Hard-working youth seeking to eke a living as content creators and social media influencers for fun, fame, and money are being slapped with a punitive 15 percent withholding tax, and at the same time, Ruto wants to impose a 316 percent tax hike on beauty products such as wigs, false beards, eyelashes, human hair, and artificial nails, among others.”
“The beauty industry is a major employer, particularly for our women and girls who have been unable to find work elsewhere. Millions of young men and women eke a living out of salons, spas, and barber shops. Those businesses face closure, and others will have to sack employees should this punitive bill be approved,” he warned.
“Despite existing high prices, Ruto wants to impose a 16 percent VAT on maize flour, cassava flour, and wheat flour. It gets worse when we factor in the proposal to expose agricultural pest control products, transportation of sugarcane, raw materials for fertiliser manufacturing, and fertiliser to VAT. The net effect is that costs rise again,” he said.
As a result of the high cost of healthcare, Mr. Odinga argued that millions of Kenyans have fallen into poverty. He also objected to plans to remove pharmaceuticals and medications from the list of items that are zero-rated or exempt from taxation, exposing them to taxation.
“Targeted are the prices of life-long medications like insulin and those for chronic illnesses like diabetes and hypertension,” he said.
If the bill passes, he raised the alarm about the impending rise in bus fares, stating that the proposed advance tax on passenger vehicles would rise from the current Sh2,400 to at least Sh5,000 and that the proposed advance tax on commercial vehicles would rise from Sh3,000 to at least Sh5,000.
“Trucks will now pay at least Sh60,000 annually, up from Sh20,000. Obviously, the cost will be passed on to the consumer, making matatu and taxi transportation more unaffordable,” Mr. Odinga said.
As the bill proposes to treat insurance compensation as income and impose a 16 percent VAT on it, he noted that should the vehicles be involved in any kind of accident, it will be a double tragedy for the owners of the vehicles.
Should Kenya Kwanza attempt to impose the bill on Kenyans, Wiper leader Kalonzo Musyoka stated that the coalition’s troops in the National Assembly are prepared to deal with it during voting and subject it to the court of public opinion.
She advised President Ruto not to play the “contempt card” in front of Kenyans.
The leader of Nark-Kenya, Martha Karua, alleged that the government was waging an “economic war” against Kenyans.
The already overburdened citizens, according to Jubilee Secretary-General Jeremiah Kioni, are just waiting for Azimio to declare a state of emergency following the bill’s passage.
