Gachagua Allies Plot to Scuttle Finance Bill 2024 in Retaliation Against Ruto

May 22, 2024

A faction of MPs loyal to Deputy President Rigathi Gachagua has reportedly launched a campaign to oppose the Finance Bill 2024, sending a clear message to President William Ruto over sidelining his deputy.

The MPs plan to voice their opposition in churches and public forums, pushing for amendments, the Standard reports.

Under the theme “an attack against Gachagua is an affront against Mt Kenya region,” the MPs argue that rejecting the Finance Bill 2024 is a strategic response. They claim some proposals in the bill unfairly target businesses in the Mt Kenya region, including the Minimum Top-Up Tax, Significant Economic Presence Tax, and Motor Vehicle Tax.

“It is unfair for Cabinet members to confuse us with such proposals. Removing the school feeding program instead of increasing its budget is an attack on the very hustlers who elected this government. We will seek guidance from the Deputy President because we need to move forward, not stagnate,” Manyatta MP Gitonga Mukunji stated at a recent event with Gachagua.

Mbeere North MP Geoffrey Ruku criticized the bill for not enhancing key production factors and opposed the proposed VAT on bread, arguing that taxing daily household goods would harm the economy. He stressed that any Treasury proposal failing to support land, entrepreneurship, capital, and labor should be rejected.

“Any proposal coming from the Treasury which does not enhance the four factors of production, which includes land entrepreneurship and capital labour, should be discarded from debate in Parliament. We want to support these four engines of production so that we can move our nation forward. This time around, we must do justice to Kenyans,” Ruku said as quoted by the Standard.

Tetu MP Geoffrey Wandeto highlighted the bill’s disproportionate allocations, such as Kes.4 million for coffee but Kes.117 billion for sugarcane millers’ debt. He warned that passing such proposals would alienate their constituents and emphasized the need for careful scrutiny to avoid past mistakes.

Embakasi North MP James Gakuya, a leading figure among Gachagua’s supporters, advocated for equitable tax application, noting the stark contrast between the benefits proposed for sugarcane farmers and those for coffee farmers. Gakuya pointed out the unfulfilled promise of Kes.80 per kilogram for coffee, with farmers receiving only half and the rest unaccounted for in the 2024-2025 budget.

Expert Opinions

Experts from top Kenyan universities and the Kenya Association of Manufacturers are expected to meet with MPs on Friday this week to provide an impartial review of the bill.

Kieni MP Njoroge Wainaina emphasized the importance of making informed decisions rather than blindly following directives.

“On Friday, ten MPs will engage experts who will give their impartial views on the Finance Bill so that we don’t just oppose or second it without understanding it. This time around, it will not be business as usual, of going to Parliament and approving the bill,” he said.

Githunguri MP Gathoni Wamuchomba condemned the bill, calling it worse than the Finance Act 2023, which led to business closures. She criticized the top-up tax proposal for burdening middle-class Kenyans by making them state debtors.

Wamuchomba explained that the tax would force businesses not meeting a 15% income tax threshold to borrow from the state, adding undue pressure on middle-income earners while exempting higher-value businesses.

She also claimed that the proposed tax on bread is a diversionary tactic to distract from the more significant issue of the top-up tax.

“The tax on bread proposal is a decoy and they will discard it after hue and cry, but it is aimed at diverting attention from the Top Up tax which is the main elephant in the room,” Wamuchomba argued.

This resistance highlights growing tensions within the ruling coalition, with Gachagua’s allies prepared to leverage their influence to shape the Finance Bill 2024 in favor of their constituents.

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