TV Reviews

Monday fact check: Analysing the facts from Tuju’s interview with Sophia Wanuna

Sophia Wanuna sat down with Jubilee’s Secretary General and the 10 minute interview left me with more questions than answers on the VAT Amendment. Bill and the Finance Bill. So, here are some of the things he said and what our research said about it.

  1. The buck stops with Parliament for accepting the bill to pass the way it was in 2013. 

To be fair and honest, it is Parliament which accepted to have the bill passed in 2013 with VAT on fuel being how it was. However, the bill was drafted in order to solve a certain problem which is to recreate the tax system that was in shambles. Implementation of the fuel tax was, however, postponed for implementation of VAT on petroleum products in 2013 to August 2016 and then in August 2018.

A thread by Ramah Nyang explains the same here

In truth, the buck does stop with Parliament but still the Treasury isn’t totally blameless.

The IMF and the Treasury signed a deal that put an exemption to some taxes in order to increase revenues, reduce budget deficits and in the process decrease foreign debt according to a story done by the Standard.

My judgment really is that everyone is to blame and no one should run away from this and the big questions remains: Who is fooling whom?

  1. People are casual with dealing with budgetary issues. 

True. Very few realised the implication this year’s Finance Bill, and the media has not been giving economy and business a front row in reporting. This has in turn not put pressure on anyone. For instance, the media was slow to pick out the VAT Bill and its imposition on Petroleum Products and the increase in tax on mobile money transfer and other products.

My assessment: The media should have done more analysis on the budget and not just flash that the budget was going to be Sh3 trillion.

  1. Kenya’s shilling is second strongest to the dollar

In the morning Kenya’s shilling was trading at 100 to the dollar. This is relatively high compared to five years ago where the dollar was trading around Sh80-90. However, Tuju was right and his facts were straight.

Economist David Ndii said in a tweet that it means low demand for dollars and more exports compared to imports; also that we are not ordering equipment and raw materials. In short, our economy is performing a little bit okay.

My judgement: This has, however, not caused any changes in VAT law and should not be an escape route. This was a dodge.

  1. Deficit is on recurrent expenditure

The budget deficit is not on developmental expenditure. This means that our ballooning wage bill is what is contributing to the budget having a deficit. This tries to justify that it is not corruption that is affecting our budgetary issues.

My rating of the interview

I think Sophia Wanuna did a stellar job on the interview. She was able to put him on the spot for saying MPs are to blame while the blame lays squarely lies on both of them (Executive and Legislature). I give the show a rating of 8/10.

 

 

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