Azimio tells Ruto to adopt prudent budget principles

Azimio La Umoja One Kenya Alliance leader Raila Odinga yesterday advised President William Ruto to live within his means by cutting down the size of his inaugural budget.

He warned that if Ruto insists on implementing the tax proposals, the country is headed into full recession adding that the controversial 2023 Finance Bill requires and must get fierce resistance.

“Looking at the (tax) proposals, one cannot help asking what planet does Ruto live on? Does he understand what Kenyans are going through?” Raila posed.

The opposition warned that since they have given their final objection to revenue-raising measures if the government overruns the National Assembly, they will ‘overrun Ruto’ in the purview of Kenyans.

“Today, we lay out our final objection to the revenue-raising measures contained in the Finance Bill 2023. We also give final instructions to our Members of Parliament after which, depending on how the Ruto administration behaves, this matter may take a very different turn. Should Ruto overrun the National Assembly, we will regroup and overrun him in the wider National Assembly of the whole people of Kenya,” they said in a statement.

Blamed State House

The leaders blamed State House and the Office of the President in the worsening of the economic situation, which has escalated in the last eight months adding that Ruto is ‘fantasizing’ about adding suffering to Kenyans who are downtrodden by the high cost of living.

“From his fantasy world, Ruto wants to double the VAT on fuel from eight to 16 per cent.  Pump prices will increase by Sh9 per litre of diesel and Sh10 per litre of petrol. The cost of goods, bus fare and production will immediately rise, again,” the leaders explained.

“The official lie is that Kenya Kwanza inherited a broke country. The truth is, the cash crunch has been caused by economic mismanagement, wasteful spending, corruption and hiring of incompetent personnel,” Raila said.

“Kenya Kwanza has borrowed more than any other regime. They have removed subsidies, raised taxes but the cash crunch has continued. They cannot pay salaries. They cannot disburse money to schools. They cannot disburse money to counties.”

The former premier advised Ruto several ways through which he can create a realistic budget based on the prevailing hard economic situation in the country without overburdening Kenyans with taxes.

The Opposition chief told Ruto to adopt a zero-based budgeting principle and stop taking the last budget of his predecessor Uhuru Kenyatta as his baseline.

“Every budget must start at ground zero where everything has to be justified. Don’t take the previous budget as the baseline,” he advised.

Instead of imposing new taxes, he urged the government to seal the loopholes that lead to loss of revenue by stopping corruption and theft of public funds.

Poor budgeting decisions

He noted that the government was about to make a bad budgeting decision through duplication of county roles and responsibilities.

“In the proposed (Finance) Bill, the budget for health is growing by Sh35 billion at the national level, yet health is among the devolved functions,” he said.

According to Raila, the ruling Kenya Kwanza coalition can save more money if it reduced the size of the government if it nullifies the appointment of the 50 Chief Administrative Secretaries.

Raila urged the executive to exercise austerity measures to curb wasteful expenditure of government revenue by cutting down on non-essential domestic and international travel.

“Freeze ministerial out-of-station allowances, ministerial house allowances and domestic allowance for cabinet and principal secretaries,” he proposed.

Azimio coalition faulted the government for withdrawing subsidies on basic goods, and then increasing taxes on the same goods since the bill contains a proposal to impose 16 per cent VAT on maize flour, cassava flour and wheat flour.

They accused Ruto of trying to change the country’s debt ceiling from the current Sh10 trillion to a moving number of 55 per cent of Gross Domestic Product (GDP) through unprocedural means; through the National Treasury rather than Parliament.

“The debt level is already 60 per cent of GDP. To beat that violation of the law, Ruto wants to force an amendment to the Public Finance Act to allow the National Treasury and not Parliament, to set a new debt ceiling,” the leaders said.

Lifelong medication

Noting that healthcare has impoverished many Kenyans who rely on life-long medication like Insulin they urged Ruto to stop imposing tax on pharmaceuticals and medicaments and instead move them from the zero-rated to tax-exempt list.

They told Ruto that Kenyans are now ‘postponing’ traveling to the upcountry because they can’t afford fuel or fare which is bad for the economy.

“We must tell Ruto that when people have to park cars at home because of the cost of fuel, it is bad for the economy. When people choose to stay indoors because they want to spend less on expensive goods, it is bad for the economy. We must remind Ruto that excessive taxation is stifling growth,” they explained.

Since the beauty industry provides jobs to many youngsters, Azimio told Ruto that the industry may collapse under the weight of taxation driving young men and women who eke a living out of salons, spas and barber shops out of business.

Additionally, they pointed out that by levying taxes on Chama or merry-go-rounds Kenya Kwanza government will strike at the heart of women’s economy by killing savings which will spread poverty.

“Merry-go-rounds are the bankers and lenders of last resort for our mothers and youth particularly in rural areas and slums. Without offering any services to the chamas, women groups and trade associations, Ruto has decided they must pay taxes which kills savings of an already vulnerable group,” they said.