Parliament on Thursday endorsed the Presidential reservations on the Finance Bill, 2018, in a chaotic sitting, at the end of which the House was sharply divided on the manner in which a tax on fuel was adopted.
With the victory, the Executive has the power to raise up to Sh130 billion through the eight percent levy on fuel products that will see about Sh17.5 billion realised from sugar confectioneries (Sh475 million), money transfers (Sh11.4 billion), betting companies and winners (Sh30 billion), housing fund (10 billion) and kerosene (Sh9.8 billion).
The memorandum proposed a deletion of 0.05 percent “Robin Hood” tax regime, which had been proposed on the money transfers of at least Sh500,000.
The government plans to recoup the lost revenue through the 20 percent imposed on the charges banks levy on customers in money transfers, meaning that the transfer charges could still go up.
There is also a new proposal to increase the price of kerosene by Sh18 a litre to check against adulteration, as well as split the current 35 percent tax on betting companies to include the winners.
This targets to raise Sh9.8 billion. Betting companies will be charged 15 percent on top of the 30 percent they pay on corporate income, while the winners will have to surrender 20 percent of their winnings to the State.
But it was not easy sailing for the executive as MPs accused the Speaker of having rigged the poll, arguing that it was clear those opposed to the memo had won.
MPs Tom Kajwang’, Vincent Tuwei, Mohammed Ali, Makali Mulu and Millie Odhiambo objected to the decision by Ms Soipan Tuya to give victory to the ayes; and through chants and boos forced the Speaker back to the floor.
The moment it was clear that pro-Kenyatta side was in danger of losing, Majority Leader Aden Duale was captured whipping members out of the House, presumably to deny it the requisite two-thirds majority that would have seen the memo thrown out.
Later, Mr Duale confirmed having forced some MPs from the chambers, arguing that as the majority leader, his plan was to deny those opposing the numbers and ensure that the government agenda was achieved.
After the House adjourned, MPs opposed to the memo cried foul, arguing that that the Executive had rigged the vote in collusion with the House leadership.
Speaking to journalists after the adjournment, Laikipia Woman Representative Catherine Waruguru expressed anger at what she described as dictatorship displayed in the House.
“Mr President, stamp your authority and don’t be swayed by cheap politics around Parliament,” she protested even as MPs vowed to fight on.
Boos, jeers and singing of “Bado mapambano” (the struggle continues) rent the air as many MPs appeared to have found an issue around which they could unite, with some chanting “zero!” in reference to their push to have tax on fuel removed, arguing that its introduction would make life difficult for the ordinary person.
At one point, an enraged House shouted down Speaker Justin Muturi and Clerk Michael Sialai, accusing them of being part of a scheme to introduce the fuel tax through the back door.
All had seemed quiet and normal as the MPs arrived in the House in the morning for the sitting that had been specially created to allow members to discuss the Supplementary Financial Estimates and the Presidential reservations on the Finance Bill.
The first sign emerged when Kiminini MP Chris Wamalwa stood on a point of order and sought to amend the Order Paper to reorganise the business of the day.
In his presentation, Mr Wamalwa wanted the President’s reservation on the Finance Bill debated ahead of the debate on the estimates.
An adamant Speaker refused and informed the House that the order of business was cast in stone, and they had to conduct it the way the House Business Committee had planned it.
The MPs went on to easily approve the Supplementary financial estimates, arguing that they had no problem with the decision by the Executive to reorganise allocations due to various departments and ministries.
In the estimates, Treasury had slashed Sh37.6 million from the Sh3.026 trillion budget for the current financial year.
The approval of the budget now gives the government legal backing to spend the reorganised budget once it is signed into law by the President.
But everything went wrong in the afternoon during the debate on the Presidential memorandum.
From the onset, it was clear many lawmakers were opposed to the President’s reservations.
The moment the Speaker left the House and Ms Tuya took over to steer the business in the committee of the whole, the MPs started chanting “zero” in reference to their desire to have fuel products zero rated, opposing President Uhuru Kenyatta’s eight percent proposal.
The chants were more pronounced on the left of the Speaker, seats usually occupied by the minority Nasa coalition, where Ruaraka MP TJ Kajwang’ proved an effective leader.
On the right of the Speaker, a section of Jubilee MPs were equally unhappy with the President’s recommendations but chose a different way of expressing their misgivings, maybe for fear of victimisation.
Jubilee Party Secretary-General Raphael Tuju arrived in Parliament early in the day just to ensure that the President had his way.
He was joined by party Vice-Chairman David Murathe in the afternoon after it became clear that things were not going well. The endless jeers prompted the speaker to come back to the house.
After listening to five members from both the majority and the minority, the Speaker ruled that a second round of voting would take place as there was a dispute over the numbers of the members present in the House when the question was put.
He then called for a 15-minute break but when the House resumed, the Speaker had changed mind.
Quoting from the Hansard, he upheld the decision that indicated that the House had adopted the President’s memo on VAT on fuel, attracting more chants and boos.
MPs who talked to the Nation and did not want to be named said they cannot go against the decision of their party leaders.
“People listen to Raila Odinga more than me. He can explain to them later what happened but I cannot, so let me just support the President’s memorandum,” a first term opposition MP said.
Most of MPs found themselves having to choose between what they thought were the interests of their electorate and the instructions of their party leaders: A majority chose to simply take instructions.
Minority Leader John Mbadi – while supporting the memorandum – said in the Finance Bill taken to the President for assent, there was no proposal for zero rating of VAT on petroleum products.
Mr Mbadi was, however, booed by his colleagues who shouted “zero…zero…zero” and was forced to cut short his remarks.
On Wednesday, Mr Duale said while the MPs want to stand with the public on VAT, there is also need to raise money for development and government projects.