“President Uhuru recommends revision of mobile phone transaction excise duty to 20% from 10%, bank transaction 20% & phone, internet costs 15%” (K24 TV, 18.09.2018).
When seeing the new planned taxes from the Jubilee, this meaning the Kenyan President Uhuru Kenyatta and Deputy President William Ruto. It all makes sense, as the new budget as explained underneath is really special. As the graft-ridden, debt-raising government under these fellas are continuing, even as the state is payer bigger and bigger slice of the budget to repay old debts. That is why austerity and ensuring a proper would be priority, however, the Jubilee are really planning an overkill. That is why the explained issue is very clear!
“If adopted by the MPs on Thursday – during the second special sitting, the budget will reduce to Sh2.971 trillion as the government fights to bridge the huge deficit because it is only able to raise about Sh1.6 trillion” (Daily Nation, 18.09.2018).
When the Daily Nation calls it a huge deficit, it is half of the budget. It is actually over half of the budget that is a deficit. These funds has to found somewhere, if they are printing money to fill this gap, than the Kenyan Shilling will loose value and soon be valued less than the Ugandan Shilling. That is something Kenyatta doesn’t want to spoil his legacy. If this means more debt, than he he continuing an evil circle of renewing old debt, while adding new debt to pay for the deficit. This shortfall will not be covered by these taxes proposed in the Finance Bill. As these will also ensure that people are closing off from the Mobile Money, using banking less and also later less online.
The Kenyan Government instead of adding growth, they will actually tax themselves into recession and even depression. As the lack of currency will appear, as the monetary system in the way of taxing transactions and mobile money, will discourage people and make life in general really expensive for paying for needed services. They will find other informal ways of doing it or even more in cash, as they will save paying the added fees. People are made like this and the Safaricom M-Pesa will be hit, just like Mobile Money was hit in Uganda earlier this year.
Kenyatta should have learned from that experience, as the Mobile Money and Transaction Tax will hurt the citizens and also ensure that the poorest will find other ways to pay their bills. As they cannot afford and will use other ways of getting the things they needs. Therefore, if the Jubilee government did their due diligence, they would explain these taxes. Instead, they are unleashing them without paperwork. That means they are just to cover the shortfall, but not by finding ways of creating wealth, but taxing everyone. Hoping the funds will magically appear and find ways to pay old debts.
If Kenyatta could print money and just pay the creditors off, that seems like his dream. However, he knows that is a bad idea. Instead, he picks to overtax and kill the economy, as the transactions and movement of money will be costly, this will constrain the public and not create development. Certainly, this will backfire. But at what level is what known, but if the deficit of bewilderment wasn’t bad enough. The overtaxing of the citizens will really put the public over the barrel. Peace.