Six reasons why NASA is supporting Uhuru’s fuel tax

The balance between the need for government to generate revenue against the suffering that Kenyans are facing due to harsh economic times is the reason that National Super Alliance (NASA) is supporting the latest fuel tax levy recommendations proposed by President Uhuru Kenyatta.

NASA announced its support for President Kenyatta’s recommendation to halve the 16% Value Added Tax (VAT) on petroleum products to 8% despite the coalition earlier indicating that it would shut down the proposal on the floor of Parliament.

The support, reached after Members of Parliament met with the coalition’s leader Raila Odinga on September 18, is conditional.

NASA believes that within one year, the political and socio-economic atmosphere will be different and there will be no need for the tax on petroleum products any longer. In turn, the coalition expects the government to implement some of its proposals.

Suna East MP Junet Mohammed read a statement on behalf of the coalition that reads, “NASA is making key proposals. If the government makes genuine effort to implement those proposals, we will agree to sit down and negotiate the extension of VAT for another year if that is necessary.”

Its support is therefore for the period of one year in what NASA said was enough time for the government to find alternative ways round the VAT, before the next financial year’s budget is approved.

“If nothing is done on these proposals, NASA will move a motion on the next budget to scrap VAT on fuel entirely,” said NASA.

These are the proposals NASA has issued in their one year ultimatum.

1. Genuine austerity measures

NASA wants what it calls across the board implementation of austerity measures which it says will eliminate extravagance and wastage of public resources in government.

“All government expenditure should be economical and be sensitive about the harsh financial times,” NASA said.

The Raila Odinga-led coalition specifically pointed out that instances of people travelling first class on public funds “because of medical conditions”.

NASA said there are too many practices and purchases in government that are wasteful because they are unnecessary or duplicative and offensively egoistic.

“We want to see government live within its means. The government has to do what Kenyan families across the country are doing, which is to cut what we can’t afford.”

2. Complete parastatal reforms

NASA called on government to honour its commitment towards parastatal reforms, which includes eliminating unnecessary ones and merging others together.

3. Tame appetite for borrowing

“We are borrowing far too much at very oppressive terms,” said the NASA coalition.

The coalition further called on government to freeze current borrowing, take stock of what the government has and its sustainability.

4. Tame ambition on infrastructural projects

NASA said there are too many infrastructural projects being launched and called on government to implement more social welfare projects that directly impact on the lives of citizens.

“The government must unveil a clear plan that will lead to new jobs for the unemployed and cut taxes for small business. As a coalition, we will support such a plan when brought before Parliament.”

5. Enhance anti-corruption fight

The coalition also wants a plan unveiled for reform of the banking sector to ensure it is in line with the war on corruption and money-laundering.

NASA said it wants to see an acceleration of the war on corruption with a clear end game, saying there needs to be a rise in prosecutions and convictions.

It also suggested reforms to the anti-corruption court to among other things have it function around the clock so as to rid the country of the corruption menace.

NASA also said that the government should instigate extensive methods of recovering stolen funds from “Lords of Corruption” including seeking for assistance from other Commonwealth jurisdictions.

6. Initiate major tax reforms

NASA said the government must initiate major tax reforms including the overhaul of the management of the Kenya Revenue Authority (KRA) and Kenya Bureau of Standards (KEBS).

“The current management of KRA and KEBS have shown no capacity to be imaginative on how to widen the tax bracket, how to net tax defaulters and how to stop dumping of goods into our country. …It is time to carry out a radical surgery of KRA and KEBS.”

NASA also proposes that Kenyans be engaged and involved in the conversation about the reforms of the tax system.

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