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Uhuru’s new tax measures set to inflict more pain

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By BRIAN NGUGI
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For 41-year-old Jane Wangeci, a resident of Kibra, Nairobi, the high price of charcoal and kerosene has in the recent past meant changing cooking habits for her young family of four.

“We stopped preparing three meals a day because the cost of charcoal and kerosene has risen beyond our reach,” Ms Wangeci said on Wednesday when the Nation visited her. “It is becoming unbearable.”

The squeeze on low income families like that of Ms Wangeci’s is likely to worsen after President Uhuru Kenyatta introduced new and higher levies on a wider array of goods and services.

The price of kerosene will touch a new high, after Mr Kenyatta proposed a new levy. Kerosene is relied upon by low income homes for lighting and powering cooking stoves, to be charged at the rate of Sh18 per litre of kerosene

The tax will lift kerosene price above the Sh100 per litre mark for the first time and have it retail close to diesel and petrol, which are currently selling at Sh115.4 and Sh125.5 per litre respectively in Nairobi.

Nairobi’s Kariokor-based small-scale trader John Kimani knows too well that he is set for a tougher ride.

This is because the cost of sending money through mobile services such as Safaricom’s M-Pesa is set to increase further after the President proposed to raise tax on the services from 12 percent to 20 percent.

“Excise duty on fees charged for money transfer services by banks, money transfer agencies and other financial service providers shall be 20 percent of their excisable value,” the President said in his memo.

Mobile phone subscribers are also set to pay more for airtime and data services as the government intends to increase excise duty on airtime from the current 10 percent to 15 percent.

“Telephone and internet data services shall be charged excise duty at a rate of 15 percent of their excisable value,” the President recommends.

This means that Sh100 airtime that currently attracts Sh10 tax will now see the Treasury earn an extra Sh5.

The increase in excise duty may prompt telecommunication operators to pass on the burden to subscribers, leading to increased prices. Mr Kimani says he makes about 30 calls a day tracking the sale of his goods to his customers.

Civil servants like 47-year-old Joseph Kamuto, who earns a basic salary of Sh50,000, are also set to dig deeper from their pockets.

Mr Kamuto will be deducted 1.5 percent of his gross pay monthly to create a fund to finance a low-cost housing project after President Kenyatta reinstated the levy that will chop salaries by up to Sh5,000.

Mr Kenyatta’s proposal is higher than the Treasury’s suggestion of 0.5 percent of the gross pay per month matched by employers, which was rejected by MPs last month.

“An employer shall pay to the National Housing Development Fund 1.5 percent of the monthly basic salary,” Mr Kenyatta said in the memo to MPs.

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The costs of bank charges like ATM, account fees and over-the-counter withdrawals will also increase after President Kenyatta proposed to double the taxes to 20 percent from the current 10 percent.

On Wednesday, public outrage and disaffection greeted President Kenyatta’s fresh tax proposals.

“The cost of living will go up significantly,” Consumers Federation of Kenya (Cofek) secretary-general Stephen Mutoro said.

“The implications are dire for consumers,” Mr Mutoro said, adding that the President was relying on “wrong advisers”.

Economic analyst Aly-Khan Satchu said the new taxes would cripple ordinary Kenyans.

“The cost of living increases are falling hardest on ordinary Kenyans. In fact, the ordinary Kenyan has been finding themselves worse off practically every year,” Mr Khan said.

“I would have preferred for the VAT to have remained at 16 percent because it was a democratic tax and everyone pays it defined by usage. I am now alarmed that our tax and spend model has run out of road.”

Manufacturers also weighed in on the tax increases and warned Kenya’s business environment is increasingly becoming “cost disadvantaged and a great disincentive for Foreign Direct Investment”.

“The increase in the cost of doing business goes against all the efforts made towards the attainment of the Big Four Agenda and improving the livelihoods of our citizenry,” said the Kenya Association of Manufacturers (KMA) in a statement.

The lobby singled out the proposal to introduce a special “anti-adulteration” tax of Sh18 per litre of kerosene, which it said will negatively affect the manufacturing sector, particularly paint, resin and shoe polish manufacturers who use kerosene as a raw material.

Kerosene comprises 40 percent raw materials in alkyd resins production.

The lobby also warned that the increase in taxes on money transfer services will raise the cost of doing business as manufacturers and other businesses transfer huge sums of money in their day-to-day operations.

“The increase in overhead costs in communication will further hurt SMEs who at times operate using mobile platforms to cut on fixed costs,” it said.

The Kenya Bankers Association (KBA) chief executive Habil Olaka warned the introduction of the higher taxes on financial services as well as mobile money transfer services will hurt the country’s efforts to promote financial inclusion.

“Financial inclusion drives by the country may be hampered by the fact that if the consumers are feeling that banking services are expensive, they may opt for alternatives,” Mr Olaka said.



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Public officers above 58 years and with pre-existing conditions told to work from home: The Standard

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Head of Public Service Joseph Kinyua. [File, Standard]
In a document from Head of Public Service, Joseph Kinyua new measure have been outlined to curb the bulging spread of covid-19. Public officers with underlying health conditions and those who are over 58 years -a group that experts have classified as most vulnerable to the virus will be required to execute their duties from home.

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However, the new rule excluded personnel in the security sector and other critical and essential services.
“All State and public officers with pre-existing medical conditions and/or aged 58 years and above serving in CSG5 (job group ‘S’) and below or their equivalents should forthwith work from home,” read the document,” read the document.
To ensure that those working from home deliver, the Public Service directs that there be clear assignments and targets tasked for the period designated and a clear reporting line to monitor and review work done.
SEE ALSO: Thinking inside the cardboard box for post-lockdown work stations
Others measures outlined in the document include the provision of personal protective equipment to staff, provision of sanitizers and access to washing facilities fitted with soap and water, temperature checks for all staff and clients entering public offices regular fumigation of office premises and vehicles and minimizing of visitors except by prior appointments.
Officers who contract the virus and come back to work after quarantine or isolation period will be required to follow specific directives such as obtaining clearance from the isolation facility certified by the designated persons indicating that the public officer is free and safe from Covid-19. The officer will also be required to stay away from duty station for a period of seven days after the date of medical certification.
“The period a public officer spends in quarantine or isolation due to Covid-19, shall be treated as sick leave and shall be subject to the Provisions of the Human Resource Policy and procedures Manual for the Public Service(May,2016),” read the document.
The service has also made discrimination and stigmatization an offence and has guaranteed those affected with the virus to receive adequate access to mental health and psychosocial supported offered by the government.
The new directives targeting the Public Services come at a time when Kenyans have increasingly shown lack of strict observance of the issued guidelines even as the number of positive Covid-19 cases skyrocket to 13,771 and leaving 238 dead as of today.
SEE ALSO: Working from home could be blessing in disguise for persons with disabilities
Principal Secretaries/ Accounting Officers will be personally responsible for effective enforcement and compliance of the current guidelines and any future directives issued to mitigate the spread of Covid-19.

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Uhuru convenes summit to review rising Covid-19 cases: The Standard

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President Uhuru Kenyatta (pictured) will on Friday, July 24, meet governors following the ballooning Covid-19 infections in recent days.
The session will among other things review the efficacy of the containment measures in place and review the impact of the phased easing of the restrictions, State House said in a statement.
This story is being updated.
SEE ALSO: Sakaja resigns from Covid-19 Senate committee, in court tomorrow

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Drastic life changes affecting mental health

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Kenya has been ranked 6th among African countries with the highest cases of depression, this has triggered anxiety by the World Health Organization (WHO), with 1.9 million people suffering from a form of mental conditions such as depression, substance abuse.

KBC Radio_KICD Timetable

Globally, one in four people is affected by mental or neurological disorders at some point in their lives, this is according to the WHO.

Currently, around 450 million people suffer from such conditions, placing mental disorders among the leading causes of ill-health and disability worldwide.

The pandemic has also been known to cause significant distress, mostly affecting the state of one’s mental well-being.

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With the spread of the COVID-19 pandemic attributed to the novel Coronavirus disease, millions have been affected globally with over 14 million infections and half a million deaths as to date. This has brought about uncertainty coupled with difficult situations, including job loss and the risk of contracting the deadly virus.

In Kenya the first Coronavirus case was reported in Nairobi by the Ministry of Health on the 12th March 2020.  It was not until the government put in place precautionary measures including a curfew and lockdown (the latter having being lifted) due to an increase in the number of infections that people began feeling its effect both economically and socially.

A study by Dr. Habil Otanga,  a Lecturer at the University of Nairobi, Department of Psychology says  that such measures can in turn lead to surge in mental related illnesses including depression, feelings of confusion, anger and fear, and even substance abuse. It also brings with it a sense of boredom, loneliness, anger, isolation and frustration. In the post-quarantine/isolation period, loss of employment due to the depressed economy and the stigma around the disease are also likely to lead to mental health problems.

The Kenya National Bureau of Statistics (KNBS) states that at least 300,000 Kenyans have lost their jobs due to the Coronavirus pandemic between the period of January and March this year.

KNBC noted that the number of employed Kenyans plunged to 17.8 million as of March from 18.1 million people as compared to last year in December. The Report states that the unemployment rate in Kenya stands at 13.7 per cent as of March this year while it stood 12.4 per cent in December 2019.

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Mama T (not her real name) is among millions of Kenyans who have been affected by containment measures put in place to curb the spread of the virus, either by losing their source of income or having to work under tough guidelines put in place by the MOH.

As young mother and an event organizer, she has found it hard to explain to her children why they cannot go to school or socialize freely with their peers as before.

“Sometimes it gets difficult as they do not understand what is happening due to their age, this at times becomes hard on me as they often think I am punishing them,”

Her contract was put on hold as no event or public gatherings can take place due to the pandemic. This has brought other challenges along with it, as she has to find means of fending for her family expenditures that including rent and food.

“I often wake up in the middle of the night with worries about my next move as the pandemic does not exhibit any signs of easing up,” she says. She adds that she has been forced to sort for manual jobs to keep her family afloat.

Ms. Mary Wahome, a Counseling Psychologist and Programs Director at ‘The Reason to Hope,’ in Karen, Nairobi says that such kind of drastic life changes have an adverse effect on one’s mental status including their family members and if not addressed early can lead to depression among other issues.

“We have had cases of people indulging in substance abuse to deal with the uncertainty and stress brought about by the pandemic, this in turn leads to dependence and also domestic abuse,”

Sam Njoroge , a waiter at a local hotel in Kiambu, has found himself indulging in substance abuse due to challenges he is facing after the hotel he was working in was closed down as it has not yet met the standards required by the MOH to open.

“My day starts at 6am where I go to a local pub, here I can get a drink for as little as Sh30, It makes me suppress the frustration I feel.” he says.

Sam is among the many who have found themselves in the same predicament and resulted to substance abuse finding ways to beat strict measures put in place by the government on the sale of alcohol so as to cope.

Mary says, situations like Sam’s are dangerous and if not addressed early can lead to serious complications, including addiction and dependency, violent behavior and also early death due to health complications.

She has, however, lauded the government for encouraging mental wellness and also launching the Psychological First Aid (PFA) guide in the wake of the virus putting emphasis on the three action principal of look, listen and link. “When we follow this it will be easy to identify an individual in distress and also offer assistance”.

Mary has urged anyone feeling the weight of the virus taking a toll on them not to hesitate but look for someone to talk to.

“You should not only seek help from a specialist but also talk to a friend, let them know what you are undergoing and how you feel, this will help ease their emotional stress and also find ways of dealing with the situation they are facing,” She added

Mary continued to stress on the need to perform frequent body exercises as a form of stress relief, reading and also taking advantage of this unfortunate COVID-19 period to engage in hobbies and talent development.

“Let people take this as an opportunity to kip fit, get in touch with one’s inner self and  also engage in   reading that would  help expand their knowledge.

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