Raila advises President Ruto to slash Gov’t budget by Ksh.500B, reduce taxes

Azimio la Umoja One Kenya coalition party leader Raila Odinga has advised the President William Ruto administration to slash its operating budget by at least Ksh.500 billion in a bid to free up resources for more urgent mitigations aimed at reducing the cost of living.

The opposition chief, speaking on Friday during the ‘Transforming a Nation’ conference held by the Konrad Adenaueur Stiftung Foundation in Nairobi, said the government must make providing relief to Kenyans its primary objective.

According to the former premier, this will be achieved by making a few policy changes such as reduction of taxes and stimulating production.

“To release resources to achieve these objectives, government must cut the budget by an estimated Ksh.500 billion. The current policies have hit low-income families particularly hard, these are the same ow income families that the administration promised to lift up,” he stated.

“These families spend more than 40% of their income on food, they deserve and require relief. In particular, we must cut fuel taxes and raise social welfare payments. At this time, we demand tax cuts, not increases; Kenyans need to see their taxes go down, not up. We believe the current taxation regime is not sustainable.”

Mr. Odinga went ahead to criticize the Kenya Kwanza election campaign ‘Hustler’ narrative that he said was akin to helping the poor by robbing the rich and the middle class in society; a policy he warned that would not solve the country’s underlying issues.

He slammed the President Ruto administration for the foundation it has laid in just its first year in power, expressing fear that undoing the damage caused would take years if nothing is done to change course right away.

The Azimio chief further hit out at the government’s tax collection arm, the Kenya Revenue Authority (KRA), for what he termed as burdening Kenyans with repressive policy changes every passing day, despite still missing its revenue obligations.

“We warned at the beginning that, beyond a certain point, increasing taxes leads to lower collection. It has become real as KRA misses one revenue target after another. Tax on fuel is up, but fuel levy collection is down,” he stated.

“We were raising this as a result of our experience when we formed government under NASA; we found an economy that was stagnant and the growth was negative, revenue collection was very low, so the government was actually just limping. When we came into government, to address the two sides of the balance sheet (income and expenditure), we found that the government was collecting Ksh.200 billion. We looked at the sources of revenue; custom duty, income tax, VAT, and so on…and then also looked at the other side of expenditure.”