Ruto Caves In (Partly), Raila Team Ain't Having It

William Ruto State House

Hello and welcome to the Evening Brief Newsletter (Super Tuesday edition) where it was mayhem all around.

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Finance Bill 2024

Hours before tabling the Finance Bill 2024 in Parliament, President William Ruto approved a slew of changes within the proposal effectively wiping out billions of Revenue his administration eyed to raise locally.

The Head of State chaired a meeting at the State House before overseeing a 10:00 am presser that announced 16 changes that included 6 tax and levy removals from the  Bill.

What Ruto is Saying: "We have had a robust public engagement on the proposed Finance Bill. We have adjusted the document accordingly. We are glad we are having conversations about issues, and our institutions are working. This is how democracies function."

President William Ruto (center) his deputy Rigathi Gachagua (left) nd PCS Musalia Mudavadi at State House.
President William Ruto (center) his deputy Rigathi Gachagua (left) nd PCS Musalia Mudavadi at State House.

Zoom In: Ruto witnessed National Assembly Majority Leader Kimani Ichung'wah and National Assembly Finance Committee Chairperson Kuria Kimani assure the public that the state took advise from a public participation exercise in reviewing the proposals contained in the bill. The main changes include;

  • The Finance Committee agreed to remove the proposed 16 per cent Value Added Tax imposed on bread after an uproar from the public. Manufacturers had estimated that should the Finance Bill sail through with the VAT, the price of standard bread would increase by Ksh10.
  • The Head of State approved the removal of excise duty on vegetable oil. Initially, the proposal had imposed a 25 per cent excise duty on vegetable oils which, according to the Kenya Association of Manufacturers (KAM), could have spiked the price of cooking oil by 80 per cent and caused ripple effects on other products like soap.
  • State House removed VAT imposed on the transportation of sugar cane. In the contentious Bill, the state had proposed a 16 per cent VAT on the transportation of cane to the sugar factories, a move that could have spiked sugar prices.
  • The Committee removed VAT on financial services and foreign exchange transactions. Initially, the proposal could have increased taxation on financial services from 15 per cent to 40 per cent which could have affected forex transactions.
  • The Committee further removed the proposed motor vehicle tax which attracted immense uproar from motorists. The proposal required all vehicle owners to pay 2.5 per cent of their car value annually with Ksh5,000 as the base minimum and Ksh100,000 as the maximum. The state was eying to collect Ksh58 billion through the tax alone.
  • The new changes also reversed the proposed increase in mobile money transfer charges. Treasury had proposed an increase of excise duty from 15 per cent to 20 per cent on mobile money transfer charges.

Read all the 16 changes in the Finance Bill here.

Protests: In the build-up to Tuesday's tabling of the bill, a section of Kenyans embarked on demonstrations outside Parliament which turned chaotic leading to the arrest of several individuals. Some sustained injuries from tear gas and water cannons.

Of Concern: As the protests turned chaotic leading to the closure of shops within the Central Business District, the US Embassy issued a safety alert to its citizens to steer clear of affected areas, especially around Parliament where a contingent of police officers had been deployed.

"Organizers have stated that the events are intended to be peaceful. However, large public gatherings can turn violent at any moment. It is advisable to remain vigilant, stay informed of the situation, and avoid large gatherings," the advisory read in part.

Repercussions: In response, the Law Society of Kenya has threatened to sue Nairobi Region Police Commander Adamson Bungei. LSK President Faith Odhiambo accused Bungei of unlawfully deploying his officers to interfere with the peaceful protests.

“We demand that Bungei calls off his directive immediately and instructs his officers to stand down from making any arbitrary arrest or meting violence against the protestors,” read part of a statement by LSK.

“We are closely monitoring today's events and will take legal action to find Bungei and any officer who violates the rights of the protestors on account of his instructions personally liable for any breaches of the Constitution and the National Police Service Act."

Azimio la Umoja Response

Azimio la Umoja Coalition, headed by former Prime Minister Raila Odinga, however, poked holes at the Finance Bill 2024 changes arguing that the press briefing was unsatisfactory.

Addressing the press, Babu Owino, a member of ODM, accused the state of being detached from the needs of Kenyans and failing to make all-round changes.

What Owino is Saying: "Despite the removal of the 16% VAT on bread, the very idea demonstrates how diabolical and disconnected this administration is from the day-to-day reality of life for the ordinary Kenyans."

"While we welcome the removal of VAT on transportation of sugar, the same should have been done on milk," he added.

Owino further accused the Ministry of Treasury of failing to satisfactorily explain the rationale of the motor vehicle tax (which has since been removed).

ODM Party leader Raila Odinga with former Governor Hassan Joho, Politician Suleiman Shabal, MP Junet Mohamed and Mombasa Governor Abdulswamad Nassir on Friday, April 15, 2022.
ODM Party leader Raila Odinga with former Governor Hassan Joho, Politician Suleiman Shabal, MP Junet Mohamed and Mombasa Governor Abdulswamad Nassir on Friday, April 15, 2022.
Raila Odinga

Demands: Azimio, as a result, demanded the police to free all individuals arrested during the protests and insisted that all Azimio leaders would shoot down the bill.

"I condemn the mass arrests of peaceful protesters conducted by the police. We demand for the immediate release of the people who have been arrested," he added.

"We are giving police 24 hours to release these peaceful protesters without charge or we will move to court against IG Isaac Koome for gross violation of freedom of speech and the right to picket and demonstrate."

Blanket ODM Directive: Earlier, ODM sent out letters to its members to shoot down the bill once it is presented in Parliament.

Earlier, National Assembly Minority Leader Opiyo Wandayi revealed that the opposition had barred MPs from traveling abroad until the Finance Bill vote had been secured.

The Bill will be tabled in the National Assembly on Tuesday afternoon and debated before voting by Thursday, June 20.

[DATA POINT] Lost Motor Vehicle Tax Billions

After removing the Motor Vehicle Tax, the state is set to lose north of Ksh58 billion which it aimed to raise from the levy.

Kimani Kuria explained that the state eyed the tax to help shore up the levy to fund the Ksh3.9 trillion budget presented last week. Motorists were to pay 2.5 per cent of the vehicle's value.


Watchmen With Guns

The new Private Security Regulation (Amendment) Bill 2024 is looking to furnish watchmen with guns when operating in six areas.

Private Security Regulatory Authority (PSRA) explained that the time was nigh for security guards to receive guns since they form the initial barrier and frontline defence against criminal threats.

Arrears where they will be legally allowed to operate while armed include;

  • Shopping Malls
  • Cash in Transit
  • Maritime Security
  • Critical Infrastructure
  • Government Institutions
  • Institutions identified with elevated vulnerabilities and security risks

PSRA argued that denying soldiers firearms prevented them from protecting themselves and the public.

“This limitation not only endangers the safety of these security guards but also impedes their capacity to execute their responsibility of protecting lives and property,” argued PSRA

“It will be implemented under stringent regulatory supervision, ensuring adherence to established safety protocols for handling firearms and related operational use of firearms.”

Here are five other stories to keep tabs on;

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This newsletter was written by Derrick Kubasu and edited by Brian Muuo.

Washington Mito contributed to the content.

Graphics prepared by Kiruti I.

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