Pressure mounts on Treasury over Finance Bill

By Alex Ndegwa

Parliament’s Budget Committee has demanded that the Treasury submits the Finance Bill for approval next week failure to which it should "arrange to refund taxpayers taxes so far illegally collected."

MPs stepped up pressure on Government ahead of Tuesday’s reopening of Parliament, with an ultimatum over the controversial Financial Bill, which has been pending since June last year.

Committee chairman Elias Mbau said the Bill, which the executive has withdrawn three times to shield banks from an amendment seeking to cap interest rates, is long overdue.

MPs argue Parliament’s permission to the Treasury to collect new taxes occasioned by last year’s budget pending enactment of the Bill detailing tax changes expired on December 31, last year.

Hence, they say, all additional taxes collected since then- Gwassi MP John Mbadi claimed experts estimate at Sh5 billion citing additional sin tax and withholding taxes for professionals- are illegal.

"The continued collection of illegal taxes by the Government smacks of great indiscipline on the part of Treasury and is a very bad practice since all revenues should be collected within the law," Mbau told a press conference at Parliament Buildings on Thursday.

He added Treasury should submit the Bill for approval by the House before April 20 or "they should forget about it" and refund illegal taxes.

The committee gave a similar deadline for submission of the supplementary budget, alleging a scheme by the Government to have the House rubberstamp the expenditure spent outside the two months stipulated in the constitution.

And Mbau explained the committee would also seek an extension of time to review the Budget Policy Statement to uphold Parliament’s role in the planning of this year’s budget.

He noted Parliament reopens on Tuesday after expiry of the deadline within which the committee should have discussed the statement.

"The committee is aware that Treasury would wish to circumvent the duty of Parliament to inform and contribute to the budget process through the Budget Policy Statement by ensuring that they didn’t submit the policy paper until Parliament went on recess," Mbau said.

He added: "The committee would wish to inform Treasury that this mischief will not be entertained. The committee will seek leave of the House and Chair to present its report beyond the April 15 timeline."

Mbau claimed the Executive deliberately failed to submit the Budget Policy Statement, whose statutory deadline for presentation to Parliament lapsed on March 21, to take advantage of the recess.

The committee is supposed to consult each departmental committee and table not later than April 15 the report on the statement detailing the broad strategic macroeconomic issues that will be the basis of the Budget.

MPs’ recommendations after scrutiny of the statement are meant to inform the Budget estimates, which the Finance Minister must submit to Parliament by April 30 every financial year.