8% fuel VAT stands after a heated debate in parliament

ERC has announced an increase in fuel prices effective from November 15th to 14th December 14th 2018
ERC has announced a reduction in fuel prices in latest review

The 8% fuel VAT proposal by President Uhuru Kenyatta has been passed by parliament after the opposing members of parliament failed to raise the required quorum to quash the President’s memorandum. The required number of MPs needed to veto the memorandum should be a 2/3 representation-233 of the 349 MPs-but there was a walk-out after the heated debate, and only 215 MPs remained in the House after a head count was ordered by Narok woman representative Soipan Tuya who was chairing the session.

Speaker Justin Muturi had called for a second round of voting after a mistake was detected after the first voting round, outlining the wrong number of all MPs present for the session. He later referred the events that took place in the Hansard and maintained that the number of MPs who were present after the walk-out led to the passing of the clause which was under consideration, amidst “Bado mapambano” chants.

Some MPs marched out of the House and led to the failed quorum including Suba South MP John Mbadi and Suna East MP Junet Mohamed
Some MPs marched out of the House and led to the failed quorum including Suba South MP John Mbadi and Suna East MP Junet Mohamed

The MPs engaged in a heated debate dominated the afternoon session as leaders tried to present their supporting and opposing sentiments. “Duale must go…Duale must go..Duale must go!” chanted the opposing members, after he tried presenting an argument supporting the fuel VAT. The majority leaders said ERC will be tasked with doing the calculations on how much the 8 percent will be translated to other sectors of the economy, and it won’t be directly mean hiked fares for commuters. He said comparisons with other peer nations don’t provide a tangible argument for those against the VAT either, “South Africa has 14% VAT, Ghana 15%, Nigeria 5%…and stop comparing us to countries which when combined don’t reach our GDP…Our budget is 99% funded by domestic revenue collected from the people of Kenya, we don’t need to beg IMF or World Bank,” he said.

Minority leader John Mbadi also faced a hard time trying to outline reasons to support the President’s proposal. The Suba South MP said that the 8% VAT, if effectively implemented will not directly equate to the outlined 8% for the common mwananchi but there are other cuts in the proposal the leaders haven’t put into consideration. He said there is no zero rating on petroleum products but that was meant with shouts of “zero, zero, zero” as the division in the House became more clear.

However, Ruaraka MP T.J Kajwang said the opposing MPs met the required quorum before Speaker Muturi entered the fray but the Majority leader led a large group of people out of the Assembly, citing foul play in the process, “A voice call on the vote was called and the chair pronounced herself very clearly that the nays have it. When we began the chair had satisfied herself that we were more than 232 in the house…we were 234 when Duale led a hound of people out,” he affirmed.

Earlier on Thursday, the national assembly slashed the state’s spending plan, cutting Kshs 37.6 billion from the Kshs 3 trillion budget. Among the key affected areas include the last mile electricity project, the schools’ laptop project, the ICT ministry, and the equalization fund.