Opposition and Catholics oppose budget, say taxes to sting hustlers

Azimio team led Kalonzo Musyoka, Eugene Wamalwa and Jeremiah Kioni react to CS Njuguna Ndung'u's 2024/2025 Budget estimates on June 14, 2024. [File, Standard]

President William Ruto’s most ambitious budget has hit headwinds with the Catholic Church and the opposition rejecting it arguing that the proposed taxes were oppressive and would hurt the hustlers.

The Catholic bishops and Azimio la Umoja Coalition leaders separately accused the government of betraying the people by formulating the Finance Bill and the Budget Estimates which were oppressing Kenyans.

The Azimio coalition while terming the Finance Bill and the Budget Estimates that were presented at the National Assembly by Cabinet Secretary Njuguna Ndung’u on Thursday a “monumental betrayal of public trust”, the opposition claimed there was ‘budgeted corruption’ amounting to Sh1 trillion.

However, National Assembly Budget and Appropriations Committee chair Ndindi Nyoro defended the budgetary estimates explaining that most of the monies that are used to pay salaries, service debts and service delivery are classified as recurrent expenditure.

In a phone interview, Nyoro said education and repayment of the national debt which got Sh658 billion and Sh1.08 trillion respectively were classified under recurrent expenditure.

“The Teachers Service Commission (TSC), which is the single largest agency, has its funds classified under recurrent expenditure and we have also allocated funds for Junior Secondary School and I hope we don’t have anybody with a problem on that. However, Kenyans have the freedom to criticize and that is not bad. We are receptive to guidance but it is also our right to clarify certain issues,” he added.

Wiper party leader Kalonzo Musyoka who read the Azimio statement had charged that “the National Treasury has Sh26 billion more in the name of development, State Department for Devolution has an increase of Sh2.6b in development expenditure and the State Department of Housing has been allocated an additional Sh72 billion. This is higher than that of 10 counties combined. What is line item ‘1071106600’ - Strategic Response to Public Initiatives’ that comes to Sh2.5 billion if not budgeted corruption? he posed.

Tax every adult

The coalition claimed the budget estimates do not stimulate economic activity despite its ‘hyperbole, flowery language, and complicated figures as it sought to tax every adult Kenyan Sh24,000 more’. 

The coalition further raised concerns over the increase of Sh23.6 billion in recurrent expenditure in the offices of the Executive President Sh1.2 billion, the Deputy President which was given Sh678 million, the Ministry of Defence, Sh11billion, Foreign Affairs Sh1.4 billion, the National Treasury Sh6 billion, the Ministry of Transport Sh1.3 billion and Ministry of Cooperatives Sh2 billion.

The Kenya Conference of Catholic Bishops (KCCB) in a statement also called for the review of the Finance Bill which they warned will cause untold suffering to Kenyans.

The KCCB referred the President William Ruto-led administration to Zachariah 7:10; which reads, “And do not oppress the widow or the orphan, the stranger or the poor; and do not devise evil in your hearts against one another.”

In their statement signed by the General Secretary, James Waweru Mwaura, the church added, “While we appreciate that the Government has a responsibility to raise taxes to support service delivery, we are concerned about several proposed measures in the Bill aimed at raising revenue. Further, we are troubled by the entrenched corruption in our public institutions and the wastage of public resources on non-essential activities.”

KCCB warned that should the bill be enacted in its current form; prices of basic commodities will be affected while noting that the Motor Vehicle Tax will increase operational costs for Small and Micro Enterprises (SMEs) while impacting negatively on current climate change mitigation efforts.

“Given the current economic challenges, it is our opinion that the proposed punitive taxes are likely to devastate the economy and impoverish majority of Kenyans. It is regrettable that despite pleas to our leaders to implement measures to lower the cost of living, a significant portion of tax revenues ends up in the pockets of a few individuals,” the statement read.

The opposition urged the international community, civil society organizations to condemn the Kenya Kwanza administration for what they termed as ‘blatant disregard for the public good’ for allegedly breaching public trust.

 “The budgetary process lacks transparency and accountability, indicating a government operating with impunity and disregard for consequences. Indeed, from the CS, PS to the Chair of the House Budget Committee and the printed budget books, all have varying figures. Who or what should Kenyans believe? This is a continuation of Kenya Kwanza culture of duplicity and lies to the point they have forgotten what lie they told Kenyans,” Kalonzo said.

On the Finance Bill, Azimio claimed the new and amended tax measures  will have a substantial impact on both individuals and businesses, maintaining that Kenyans can only thrive if the government stimulates the economy.

“We note that ordinary Kenyans, Mama Mboga, Boda-Boda riders, and the people of mjengo and Mkokoteni have nothing to gain from this Bill because Kenya Kwanza is targeting them for the second time with a double taxation plan that aims to increase taxes by approximately Sh24,000 per adult Kenyan per year.”

Other punitive taxes that the Azimio cited were The Significant Economic Presence Tax (SEPT) which they said will significantly increase the tax burden on digital service providers and Eco Levy which will be detrimental to Mwananchi, as it will increase prices for all plastic packaging materials, batteries, and hygiene products among others.

 Jubilee Secretary General Jeremiah Kioni claimed that the government abandoned the public transport sector, forcing Kenyans to opt for private means, a sector the government was to go after through the proposed Motor Vehicle Tax.

  Former Laikipia governor Ndiritu Muriithi said that the government can not build the economy by increasing taxes, adding that in developed countries, governments reduce taxes to stimulate the economy.