SEPTEMBER 18, 2018:
STATEMENT BY THE NASA PARLIAMENTARY GROUP ON TAXATION MEASURES:
The Parliamentary Group of the National Super Alliance meeting today under the chairmanship of Party Leader Rt. Hon Raila Odinga, resolved as follows:
1. That NASA recognizes and appreciates the precarious situation the country is in with regard to meeting its development needs through the budget.
2. The party further recognizes the suffering Kenyans are going through as they feel the pinch of rising cost of living that has been worsened by taxation measures adopted by the government.
3. That the pinch and resulting from taxation run hand in hand with the people’s expectation for improved services and accelerated development in critical areas like roads, schools, hospitals, electricity and housing, among other things.
4. In light of the need to address the suffering of the people while ensuring development is also delivered, we recognize and appreciate that there was bilateral support for our attempt to remove VAT altogether and the President was able to meet us half way, lowering the tax from 16 per cent to 8 percent. NASA therefore offers its conditional support for the initiative to cut VAT from the initial 16 per cent to 8 per cent.
5. We see that cut being in line with our earlier attempt in the National Assembly to have the VAT scrapped altogether.
6. Our support is however conditional. We offer support for the VAT for a period of one year.
7. NASA is making certain key proposals. If the government makes a genuine effort to implement those proposals, we will agree to sit down and negotiate the extension of VAT for another year if that will still be necessary.
8. NASA believes that if these proposals are implemented, there will be no need for extension of VAT beyond one year.
9. However, if nothing is done on these proposals, NASA will move a motion in the next budget to scrap VAT on fuel entirely like it did this time. Our proposals are as follows:
1. During this one year, we would like to see genuine austerity measures across the board. These austerity measures must include:
a. Elimination of extravagance. All public expenditure should be economical and be sensitive about the harsh financial times. We don’t want to hear of people travelling first class on public funds because of “medical conditions”
b. Elimination of waste. We must now make a genuine attempt at eliminating waste in government. There are too many practices and purchases that are wasteful because they are unnecessary, or duplicative and often simply egoistic.
c. We want to see the government live within its means. The government has to do what Kenyan families across the country are doing; which is to cut what we can’t afford. For instance, the current situation where virtually every Cabinet Secretary and senior officers of the State travels in fuel guzzlers complete with chase cars and lead cars is not sustainable and is not in tune with the economic situation the country is in. It must end with immediate effect and help the country save money.
d. Completion of parastatal reforms. The government committed to reform parastatals by eliminating unnecessary ones and merging others. This should be completed as soon as possible.
2. The government must tame its appetite for big borrowing. We are borrowing far too much at very oppressive terms. We must freeze any further borrowing, take stock of where we are, how sustainable the current borrowing is and resume borrowing on a more sustainable premise.
3. The government must also tame its ambition of infrastructural projects. There are too many projects being launched left, right and centre. We need to have less on these projects and come up with more social welfare projects that affect the people more directly in their lives.
4. We need the government to unveil a clear plan that will lead to new jobs for the unemployed and cut taxes for small businesses. As a coalition, we will support such a plan when brought to Parliament.
5. The government must present to the country a clear plant to review and reform of our banking sector to ensure it is in line with the war on corruption and money laundering.
6. The government must to put more effort in the anti-corruption drive with a clear program for ridding the country of this menace and a clear end game. Specifically, NASA wants to see:
a. More speed in the investigation of cases and in the approval of indictments. There is a clear slowdown of the fight. We want to see it multiplied tenfold.
b. Prosecutions need to begin and we expect that there will be convictions.
c. We recommend the creation of special anti-corruption courts to deal with corruption with the same vigour manifested by the DPP and DCI. Those courts should preferably operate round the clock. If need be, the government should appeal for help that will aid rapid prosecution especially from Commonwealth jurisdictions.
d. There is yet no definite program to recover stolen funds. Those funds run in billions and will easily fill the hole in our budget and finance a number of our development needs. Switzerland and the United Kingdom have offered to repatriate corruption proceeds in their country. We need to see serious efforts by the government to follow those offers. The government must also rope in more countries where our stolen money is stashed and ensure those monies are repatriated. We are strongly opposed to the current situation where Kenyans have to go back to their pockets to meet our development needs while lords of corruption continue to enjoy its proceeds without breaking any sweat. The lords of corruption got us into this mess in the first place and we must recover our money from them and plug these budgetary gaps. We want to see a well thought out and effective multi-agency asset recovery initiative.
7. The government must initiate major tax reforms, which must include overhauling the management of KRA and the Kenya Bureau of Standards. The current KRA and KEBS have shown no capacity to be imaginative on how to widen the tax bracket, how to net tax defaulters and how to stop dumping of good into our economy. Indeed, KRA and KEBS officers are being reported daily as some of the most corrupt public servants. It is time to carry out a radical surgery at KRA and KEBS. It is also time to engage Kenyans into a conversation about reform of the tax system.