President Uhuru Kenyatta had termed the decision by MPs to suspend the implementation of the 16% VAT on petroleum products as “good politics, but bad leadership” he went on to say that the MPs had chosen an easier path, and to that end he was probably right. But did he also choose an easier one?
The MPs indeed chose an easier path when they postponed the 16% VAT without considering how the government was expected to meet the revenue gap created as a result. In fact, even with the enactment of the Finance Bill 2018 into law there’s still a gap of about Sh17 billion after the president attempted to appease the public by slashing the VAT on petroleum products from the 16 to 8%.
And while the president struggled to assure the public their taxes will be used prudently following the many corruption scandals that have seen tax payers lose billions of shillings; the devil as we all know are in the details. There’s a need to scrutinize the budget closely and see what exactly we’re funding.
For instance, this financial year, the government is planning to spend the equivalent of 15.9 percent of our GDP (Sh1.55 trillion) on recurrent expenditure. Meanwhile, the development expenditure is projected to cost Sh625.1 billion (equivalent to 6.4 percent of our GDP).
It’s worth noting that our appetite for debt also ensures an increased recurrent expenditure because of the interest payments factored under recurrent. However, a bloated wage bill remains the big elephant in the room, but first things first.
To begin with, the President whether out of political shrewdness or outright disregard for the wage bill crisis, created new offices that appeared as an attempt at bringing back the Assistant Minister positions through the back door. He said these positions – Chief Administrative Secretaries (CAS), would help the Cabinet Secretaries better coordinate the affairs of their respective ministries. Needless to mention the position comes with office staff and all the perks enjoyed by an officer at that level.
The President made that announcement in January with the full understanding of the wage bill crisis. In fact, at the height of campaigns last year, the President supported the proposal by the Salaries and Remuneration Commission (SRC) to reduce the pay for State officers and get rid of a range of allowances. He was quoted saying, “The days of wasteful allowances and peculiar but inexplicable payments are behind us. Better and more prosperous days lie ahead,”
Yet here we are with a more bloated Executive than we had in President Uhuru’s first term and Legislature that’s fighting the SRC on the same implementations which brings into question their sincerity on reducing Wanjiku’s tax burden.
National Assembly for the first time, or so it seemed stood together with the majority public following the chaotic session that saw the dramatic passing of the Finance Bill 2018. A number of the national papers commented on this defiance or refusal to bow to the House leadership.
However, some of the MPs particularly Gatundu South’s Moses Kuria didn’t shy away from calling out his colleagues on the matter. As a member of the Budget and Appropriations Committee, he argued the MPs were being insincere because you couldn’t pass such a budget and not think about how it was going to be funded. Other experts also thought it was a charade meant to hoodwink the public.
Of course the MPs would want the public to believe their effort was sincere. If indeed our MPs are truly feeling the burden that the Kenyan Tax payers are feeling, then they should take an interest in the odd fact that the ratio of our recurrent expenditure to development is always growing disproportionately.
More importantly, they should look into the ballooning wage bill that they themselves have become a stumbling block. To show their seriousness, let Parliament withdraw the case against SRC and accept the salary scales as well as other allowances as gazetted by the commission. This could save the country an annual Sh8.8 billion annually.
The President as the head of the Executive would do well to remember his own statement on the matter that, “All of us in the public service must remember that this is a calling and that is what servant leadership is about.” And like him, MPs as elected leaders must observe the same.
This will not solve everything but it’s a good starting point and communicates genuineness from both the Executive and Legislature. It would also provide a good healthy relationship to begin tackling among other issues the overlapping nature of some state corporations or the need to deal with such things as the controversial NGCDF and the Affirmative Action Fund.