Why Nasa backed Uhuru's new taxes

Fears that Kenya would pay high interest rates in future on loans it has borrowed and the 2022 elections made NASA members support President Kenyatta’s proposed tax on fuel.

To get members' support, Opposition chief Raila Odinga was said to have chaired a five-member meeting at his Capitol Hill office before the Parliamentary Group (PG) meeting at Orange House yesterday.

Sources told The Standard the five members Raila met were ODM Chairman John Mbadi (Suba South), Junet Mohamed (Suna East), Opiyo Wandayi (Ugunja) and party officials Oduor Ong’wen and Edwin Sifuna.

Mr Sifuna said the five had gone to present their views to Raila on why they were opposed to plans to tax Kenyans more.

“Each one of us presented their views based on consultations with economic experts who had advised us it was better to start paying the debt now than in future, when it will be costly. We decided to support the new taxes with heavy hearts,” said Sifuna.

After consulting the experts, the NASA officials persuaded their members to back the President's plan for an eight per cent VAT on petroleum products, alongside other budget cuts to plug financial shortfalls and save Kenya from a meltdown.

“We are aware the Government is broke and even if we oppose Uhuru's plan, he could still find his way to fill the budget deficit. This way, the public debt will continue increasing and earning higher interest which Kenyans will still pay in future. That’s why we'll support, but with conditions,” said a source.

The source said NASA opted to support the proposal as a way of winning Uhuru’s support in the 2022 General Election should it field a presidential candidate.

“We know the President is retiring but still has his support base. In case we have a candidate, we will call upon him and his supporters to back our candidate,” the source said.

NASA officials claimed they were also aware of a scheme by Jubilee to make the special sitting of Parliament a Jubilee-NASA affair for the Opposition to be seen as being opposed to the President’s proposal and being anti-development.

After projecting NASA as opposed to the proposal, Jubilee would then use their numerical strength to approve it and NASA would be left with egg on the face, said the source.

 NASA spelt out conditions for its support for President Uhuru’s proposal, including elimination of extravagant spending and wastage and completion of parastatal reforms. The Government should also cut down borrowing.

NASA also wants the Government to live within its means, stop some infrastructure projects and step up the anti-corruption drive. Other conditions include reviewing the banking sector, drawing up a plan to generate jobs and bringing back stolen wealth.

"We appreciate that there was support for our attempt to remove the VAT altogether and the President was able to meet us half way, lowering the tax from 16 per cent to 8 per cent. Therefore, NASA offers its conditional support to the President's plan,” said Mr Mohamed in a statement read to the media.