New tax law will not hurt kenyans-Rotich

Treasury Cabinet Secretary Henry Rotich has defended the government’s move to sign into law the controversial Finance Bill, 2018 which has caused public outcry.

Mr Rotich on Sunday said there was no option but for the bill to be passed for Kenya to raise enough revenue to fund the budget and run the country.

He said that the passage of the Bill gives the government the platform to implement the budget. Hadn’t Parliament passed the bill, government would not be in a position to raise revenue which they will do it in a manner that will not hurt Kenyans.

Mr.Rotich disclosed that with the passage of eight percent VAT on petroleum products combined with other revenue collection measures, will enable the government to raise Sh48 billion, adding that Kenya’s debt currently stands at 5.8 percent of the Gross Domestic Product, which translates to Sh560 billion.

President Uhuru Kenyatta signed the bill after MPs on Thursday last week backed his recommendations on the Finance Bill.

“I have signed into law the Finance Bill, 2018. I give my commitment that I will ensure proper utilisation of public resources for a better Kenya. I will not relent in the war against corruption,” President Kenyatta said on twitter.

Further, Mr Rotich maintained that the government had no option but to pass the bill following the promulgation of the 2010 Constitution. For we have seen an expanded Parliament and Senate, which requires a lot of money. It also came up with 13 constitutional offices. As the government, there is no option but to implement the law though it has not been easy as it requires money.

He said the creation of the 47 counties has also eaten a big budget, adding that more than Sh1 trillion has already been disbursed to the counties and other constitutional offices since 2013.

The passage of the Finance Bill gives the President the legal mandate to levy the new taxes that he hopes will raise the Sh130 billion he needs to keep his spending plans on track.

The State intends to raise Sh17.5 billion from eight percent VAT on petroleum products, Sh9.8 billion from the “kerosene adulteration” tax while imposition of Sh20 per kilogramme of sugar confectionery, including white chocolate, will raise Sh473 million.

The President has also succeeded in pushing through the 1.5 percent levy for the National Housing Development Fund that is expected to generate about Sh57 billion a year.

Under the Housing Development Fund plan, an employer and employee are separately required to contribute 1.5 per cent of the monthly basic salary so long as the sum of the employer and the employee contributions does not exceed Sh5,000.

The President also expects to raise Sh20.2 billion from the 12 percent excise duty on fees charged for mobile money transfer services, the 15 percent excise duty on telephone and internet data services and the 20 percent duty on fees charged for money transfer services.

 

 

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