I will not relent on new tax measures, declares Ruto

President William Ruto said yesterday that he will not back down on his push for the implementation of the proposed taxes in the controversial Finance Bill.

In particular, the Head of State maintained that the Housing Fund, which has raised a major public discourse, will be enacted to pave way for the construction of over 200,000 housing units in the country.

The Head of State's speech during this year's Madaraka Day celebrations held in Embu town dwelt much on the proposed taxes with emphasis given to the Housing Fund.

The President also used the occasion to launch the second loan scheme under the Hustler Fund targeting group investors.

"By catalysing the construction of hundreds of thousands of affordable housing units, we shall also be stimulating productivity and competitiveness in the manufacture of cement, steel, paint, nails, ballast, timber, roofing materials, windows and doors, among many other products," President Ruto said.

President Ruto noted that the current debate elicited over the Finance Bill, defined the destiny the country was taking in which citizens are given a chance to express themselves on matters touching on their wellbeing.

"Our public discourse and political discussion and the agenda of social debate has changed for good. Substantive policy issues continue to define the national conversation well beyond the election. At the moment, there is a robust debate on the Finance Bill taking place everywhere in this country: Church, social places, formal and informal workplaces, all media platforms and busy markets, as well as in urban and rural gatherings," said the President.

Major debate

He added that Kenyans were taking part in robust conversations about the economy. The conversation is inclusive, focusing on the proposals to raise taxes to discourage imported goods that can be manufactured locally to grow local manufacturing and enhance export competitiveness."

He said that in the debate, Kenyans have shown interest to know how the government will create the one million jobs it has committed to provide through the Affordable Housing Programme.

The proposed introduction of a three per cent tax on employed Kenyans has brought out a major debate with the opposition, trade unions, a considerable number of Kenyans expressing their disapproval.

Opposition leader Raila Odinga has given the president up to Monday next week to withdraw the controversial Bill failing which the Azimio brigade will call for countrywide protests.

On Tuesday, 130 MPs from the Opposition Azimio coalition made a public pledge to shoot down the Bill once it is tabled in Parliament saying it was imposing punitive taxes on already overburdened Kenyans.

Sections of the business community, church leaders, trade unionists, civil society and professional organisations have raised reservations about the tax proposals demanding that they should be shelved or radically altered.

Besides the house levy, the Bill proposes taxes in the public transport sector, manufacturing and the telcom industry.

An Azimio parliamentary group meeting on Tuesday declared that the millions of Kenyans struggling with the high cost of maize flour, sugar, fuel, school fees, and electricity, do not believe the Bill is from a government working for them.

The members drawn from both the National Assembly and Senate together with Azimio leadership charged that the Finance Bill 2023, emanated from people "living either in another planet or another country."

"It is our position that the Finance Bill as presently crafted must be withdrawn and replaced by a Bill that appreciates the suffering the people of Kenya are going through. Azimio MPs have resolved to sign a public pledge to oppose the Bill, awaiting its withdrawal," said National Assembly Minority Leader Opiyo Wandayi.

"There are businesses struggling with shortage of supplies and high taxes, Kenyans struggling with high medical expenses, parents, civil servants struggling with diminishing pay and increased tax deductions. Our members have come to the conclusion that it has only bad news, worse news and the worst news," said Wandayi.

But a defiant Ruto yesterday vowed to pursue the Bill describing the debate around it as a demonstration that the country had matured and that Kenyans can engage in issue-based discourse.

"We are truly a trailblazing nation. Many countries struggle in vain to generate a national debate on public financing, taxation or other policy issues," Ruto said as he defended the proposed tax.

Better information

The President was addressing the country's 60th Madaraka Day celebrations graced by senior government officials and foreign dignitaries.

"In Kenya, we have easily sustained intense discourse on the Finance Bill and the Affordable Housing Policy for several weeks now. The debate has remained issue-oriented, and there is no hint of divisive ethnic rhetoric at all. The cost of living is keeping all leaders, including myself, awake and this is precisely as it should be."

President Ruto said the debate on the Finance Bill should not be centred on whether the housing contribution is a tax or a contribution but on the investment and returns to the contributors.

"Apparently, the intense national debate on housing is not about whether it is a tax or a contribution. The attention sharply focused on housing contributions is an implicit expression of ownership. People desire better information and stronger assurances regarding the custody, security, investment and return on their money," explained the President.

Accountability

He said the discourse on public finances and the Housing Fund has opened the eyes of Kenyans to the emergence as a "stakeholder republic".

"Kenyans today, more than ever, are fully involved citizens in shaping public policies and making institutions accountable in the manner in which they run national affairs," Ruto said.

"The Affordable Housing Programme is an intervention supporting the local construction industry, including the Jua Kali sector, to create high quality and competitive opportunities for manufacturers and jobs for citizens," he explained.

He said that by enhancing industrial productivity, export performance will increase and have a positive impact on the balance of trade, employment creation and the growth of wealth.

"Our vision for the Affordable Housing Programme is premised firstly on the economic objective of creating a million direct and indirect employment opportunities throughout every value chain in the housing development ecosystem," said the president. He said beyond the cost of houses, the affordable housing programme entails an entitlement aspect, which gives priority to the communities resident where the projects are situated, adding that by doing so, it will raise the bar on quality at the bottom.

President Ruto also launched the second product of the Financial Inclusion Fund, also known as the Hustler Fund.

The Head of State stressed that the fund was aimed at facilitating people's access to funding through groups and will usher the collective-driven competitive market enterprise to the online domain. Under the individual Hustler Fund loans, Ruto said the total number of digital transactions now stands at 42.5 million through which 20.2 million Kenyans have accessed nearly Sh30 billion, and repaid Sh19.7 billion, with seven million being repeat customers.