Rotich faces court, taxpayer hurdles ahead of ambitious budget

Treasury Cabinet Secretary Henry Rotich is once again expected to face an increasingly restless citizenry and uncompromising courts as he strives to raise Sh3.1 trillion for the year beginning July.

Citizen activism and bold court rulings have of late become an important feature in the national budget, determining the pace of implementing the various revenue collection measures.

Most of the stringent measures introduced in 2018/19 budget to boost revenue collection and help narrow fiscal deficit were either abandoned or are still in court after angry citizens opposed them.

If Mr Rotich had his way, the mass housing initiative, President Uhuru Kenyatta’s pet project, would be fully functional after multilateral lenders like World Bank and the African Development Bank came on board with Sh25 billion and Sh10 billion respectively.

“Unfortunately, the implementation of the Housing Fund Levy as a mandatory contribution for both employees and employers, has, at every turn, been fraught with legal hurdles and obstacles,” President Kenyatta admitted on June 1.

“It is my hope that these hurdles will be overcome without further undue delay to ensure implementation.”

Earlier, MPs, responding to bankers’ protests, blocked Mr Rotich from imposing a 0.05 per cent tax on bank transfers above Sh500,000 and a two percentage point increase in excise duty on mobile money transfers.

The intervention came as commercial bankers, through their lobby, the Kenya Bankers Association had filed a court case to the effect in court.

The scrapping of the levies denied Treasury Sh27.5 billion that he had factored in his budget to come from the banking transactions in the fiscal year ending on June 30.

And perhaps the most dramatic action were protests by citizens over Mr Rotich’s plan to introduce 16 per cent VAT on petroleum.

It started with members of the Kenya Independent Petroleum Dealers Association going on strike and suppliers stopping to transport fuel from depots. The resulting shortage would later fuel widespread public anger and force President Kenyatta to intervene, cutting the VAT rate by half.