Home General Uhuru gives in on CDF as Kalonzo’s Wiper backs cuts

Uhuru gives in on CDF as Kalonzo’s Wiper backs cuts

by kenya-tribune
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President Uhuru Kenyatta looked set to have his way last night after
Wiper MPs joined ODM colleagues in declaring support for his
memorandum and proposed budget cuts.

The
MPs appeared to soften their opposition after the government agreed not
to slash the CDF and the National Government Affirmative Action Fund.
Proposed cuts in the two funds had angered most MPs who pledged to
marshal the two-thirds majority required to overturn the President’s
proposals. The vote is today.

Read: Uhuru cuts VAT, opts to tighten spending

Uhuru proposed several areas of taxation in his
memorandum to the House and the Jubilee Party Parliamentary Group
meeting on Tuesday at State House. He pleaded with his
brigade to support it.

Opposition leader Raila Odinga also led his troops at Orange House to support the government.

Treasury CS Henry Rotich robustly defended the cuts.

However,
despite entreaties, defiant MPs from both Jubilee and the opposition pledged to
vote against the President.

Yesterday Wiper leader Kalonzo Musyoka said, “Difficult as the matter is, this is the time to stand up to be counted.”

“I
hope sincerely the vote tomorrow [today] will not be about the
handshake. I am quite sure the matter should be seen differently.
It’s not a matter of the handshake,” the former Vice President told a
press conference.

Kalonzo said his support for President
Kenyatta’s reduction of the VAT on petroleum products conformed with Wiper resolutions in July to work with Jubilee.

“I call upon
all Wiper members to give unequivocal support to proposals by the
President, particularly reduction of fuel tax from 16 to eight per
cent,” he said at his Karen home.

ODM has 65 MPs, Wiper has 20 and Jubilee has 146.

Read: NASA’s year-long conditions to back Uhuru on proposed 8% fuel VAT

Majority
leader Aden Duale spent most of the day trying to persuade Jubilee MPs
not to mobilise troops and overturn Uhuru’s memorandum.

“We
have made good progress, especially in the CDF issue. The government
has ceded some ground and we almost agreed,” Duale said last evening.

Even
as the government went into overdrive, the High Court dealt it a blow
when it outlawed the Finance Bill [deferring VAT] because “there was no
public participation.”

Justice Wilfrida Okwany said it was dangerous to implement a bill without public input.

She
declared the Provisional Collection of Taxes and Duties Act 
“unconstitutional and therefore invalid, null and void” and the
Provisional Collection of Taxes and Duties, Order 2018, also
unconstitutional.

The
court decision implies the new taxes imposed on kerosene, bottled
water, mobile money transfers, imported vehicles and the Robin Hood tax
were unlawfully effected.

She
ruled in favour of activist Okiya Omtatah who sued Treasury CS Rotich,
the KRA commissioner general, the National Assembly and the Attorney
General.

In Parliament yesterday, Rotich told National Assembly Finance committee to accept Uhuru’s proposals. He said some tax proposals aimed to “widen the tax bracket.”

“We
reformed the tax law in 2013 because almost everything, 435
items, were tax-exempt. This was to expand the tax base because we’ve been losing revenue because of the narrow tax base.”

When asked why the government proposed to tax sugar confectioneries like sweets, which MPs said will kill industries, Rotich said the levy aimed to regulate consumption.

Rotich
told the Finance committee the cost of treating conditions related to sugar consumption far outweighs the benefits.

“We are complaining about the tax, yet we are spending more
on health challenges,” he said. “By discouraging this, you are protecting Kenyans’ health. These are WHO
recommendations and it’s where the world is headed.

The committee was considering the Uhuru’s memorandum on the Finance Bill and today it will recommend adopting or rejecting it.

To defeat or alter Uhuru’s memorandum requires at least two-thirds, 233 of  349 MPs.

Read: Week of reckoning as MPs decide whether to back Uhuru VAT proposal

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