Ruto Recounts How Kibaki Set Stage For Increasing Taxes
Accordingly, it was Kibaki who stressed the need for all Kenyans to pay taxes, regardless of social status, which was key in raising revenue for effective service delivery.
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President William Ruto on Sunday, August 6 revisited the efforts by the late former President Mwai Kibaki in implementing tax measures that increased government revenue exponentially.
Speaking during the interdenominational Thanksgiving Service at the Sagana State Lodge, Ruto asserted that he was using his current term to build Kenya on the foundation of the economy built around the taxes raised through tax measures.
He borrowed a leaf from the late Kibaki, who succeeded in taking the country's revenue from Ksh200 billion to Ksh1 trillion during the 10 years he spent as Kenya's third president.
Accordingly, it was Kibaki who stressed the need for all Kenyans to pay taxes, regardless of social status, which was key in raising revenue for effective service delivery.
President William Ruto with the late former President, Mwai Kibaki, at the 81st celebration for the Japanese Emperor at Japan Ambassador's residence, Nairobi on December 4, 2014. /WILLIAM RUTO
"We are building our country on the solid foundation of our economy built around the taxes we raise. We have a teacher who taught us this, and he came from the Nyeri region.
"When the late Mwai Kibaki took power as President, we had amassed Ksh200 billion as a nation, and he told us to pay taxes and you heard it clearly. He pushed us when he was leaving power after 10 years and we have come from Ksh200 billion to Ksh1 trillion," he explained.
Ruto did not relent in defending his stance on imposing a series of tax measures to raise revenue, arguing that it was the late Kibaki who shared his wisdom on building a country through taxes instead of debt.
He also recounted the solutions he had to come up with to reduce the cost of fertilizer while he served as the Minister for Agriculture in Kibaki's government, which he has since replicated in his current term as Head of State.
"We increased our taxes five times during Kibaki's time. Do you think I'll make a mistake if I don't follow in the footsteps of Kibaki, who taught us that a country is built on taxes? A country is built on taxes, not on debt.
"I worked in Kibaki's government and when I was the Agriculture Minister, he instructed me to look for ways to reduce the cost of fertilizer, which went from Ksh6,000 to Ksh2,500, and that's what I've done again, because of Kibaki's teachings," he went on.
The President aims to use tax measures to raise revenue so that the Kenya Kwanza government delivers on the promises it made to Kenyans prior to the August 2022 general elections. Some taxes, for instance, such as the Housing Fund as proposed in the Finance Act, of 2023 have generated uproar across the country.
On Saturday, August 6, the Kenya Human Rights Commission, alongside six other agencies, moved to court to challenge the backdating of the Affordable Housing Levy, which was set at 1.5 per cent of gross salaries in the Finance Act.
"The matter is urgent and requires an August recess hearing because of the intervening threat to lives and livelihoods and due to the retrospective date of 1st July 2023," read court documents in part.
The lobby groups further challenged the Act, noting that it violated Articles 10 and 201 of the Constitution "by imposing retrogressive tax measures which burden low-income earners excessively and threaten their right to life and livelihood under Articles 26 and 43 of the Constitution."
The Kenya Revenue Authority (KRA) on Friday, August 4 confirmed the backdating of the Affordable Housing Levy (AHL) which was suspended alongside the Finance Act by the High Court in July.
After the Court of Appeal lifted conservatory orders issued against the implementation of the act, the government moved to compel the employers to submit monies that were due for July 2023.
What this therefore means is that employers will be required to remit the housing levy for both July and August, a move which could see employees inflicted with double deductions.
The taxman directed that the employers are obligated to remit the 1.5 per cent Housing Levy deduction by the ninth of every month, with employees also paying their 1.5 per cent contributions within the same period, a total of 3 per cent.
