PHOTO/STEPHEN MUDIARI Cabinet Secretary for Treasury Henry Rotich (centre, infront), reading the 2013/14 budget estimates in Parliament, Nairobi, June 13th, 2013.  NATION

The Jubilee government’s first budget has sparked angry reactions over its provisions on food and education.

Teachers have vowed to sabotage the much-hyped free laptop project for all children entering primary schools until they are paid their arrears for allowances, allocated cash for promotions and 40,000 new tutors employed.

The Kenya National Union of Teachers (Knut) chairman Wilson Sossion said the over 200,000 members will not receive the  laptops in schools  until  they are paid their dues, which were part of a 1997 pay deal that raised their salaries to more than 100 per cent during the Moi regime.

In his budget statement on Thursday, National Treasury Secretary Henry Rotich allocated Sh53.2 billion for the laptops to be given to Standard One pupils next year.
But speaking in Migori yesterday, Mr Sossion said: “It is a shame that Sh53  billion has been allocated for the laptop project,  but nothing for teachers’ promotions and allowances”.

Universities Academic Staff Union chairman Sammy Kubasu said the lecturers will have no option but to withdraw their services if the government fails to pay up.

They are demanding Sh3.9 billion meant to be the last phase of a salary deal agreed on with the government last year after a strike.
Most MPs who spoke to the Saturday Nation said they would oppose any move to increase the cost of basic commodities such as bread and milk, as is likely to happen if Parliament passes the contentious VAT Bill.

Also rejecting the Bill’s provision is the lobby group, Consumer Federation of Kenya (Cofek).

Speaking of the possibility of basic commodities prices rising, National Assembly Minority Leader Francis Nyenze said the poor must be cushioned from extra burden, adding, any tax measures should be interrogated to ensure the poor are not punished.

“If any measures are brought here through VAT that hurts the poor man we shall reject them,” he said, adding: “We don’t want those who live in poverty to be taxed harshly.”

The cost of basics

The government plans to table the Value Added Tax Bill in Parliament, whose passing would lead to an increase in the cost of basics such as milk, bread, maize and wheat flour, sanitary towels and newspapers.

With maize being Kenyans’ staple food, any increase in the tax charged on maize flour would automatically be criticised for its possible effect on the large number of Kenyans who rarely go to bed without eating ugali.
Suba MP John Mbadi said Parliament will have to eliminate a number of grey areas in the VAT Bill and exempt some items from tax.

He said the Bill has some errors and Parliament must scrutinise it so that it does not end up increasing the price of basic goods.

“We’ll need to isolate basic commodities so that we don’t tax them,” he said.

Speaking at Sori Secondary School in Nyatike, Migori County, during an annual meeting of the local Knut branch, Mr Sossion  said teachers never asked for laptops in any policy document  formulated within the education sector and wondered whose idea it was.
Instead, he said, the union had asked for Sh15 billion to recruit 40,000 teachers to address staff shortage.

He termed the Sh50 billion allocation for laptops as a misplaced priority.

“We disown the government of President Kenyatta because instead of addressing core issues, it has opted to misbehave with public funds.”

Mr Sossion faulted the Jubilee administration for “taking teachers for a ride “ and warned that the union would not allow the government to mismanage public funds.

Knut’s rival, the Kenya Union of Post-Primary Teachers Union, has issued a strike notice over pay arrears and promotions.

The laptop project was a key campaign pledge of the new administration, which was largely received with skepticism.
Young government

Prof Kubasu said union leaders had, after sensing the money was not factored in the estimates, met Education Cabinet Secretary Mwangi Kaimenyi on Thursday morning, hoping that a last-minute decision could be made.

“But we were saddened that the budget figures announced later (by Mr Rotich) did not include our allocation.”
The lecturers were paid the first phase of the salary deal in November last year. Prof Kubasu said the union leaders plan to meet with Prof Kaimenyi next week to look at ways of tackling the issue “before we ask our members to stage a strike that could hurt a young government.”

Mr Rotich said on Thursday that “there are some areas there that we’ll have to discuss with Parliament in terms of having (the VAT Bill) passed.”

“That Bill, if passed, will help a lot in simplifying the administration of VAT plus also helping in raising revenue.”

“Enacted in 1990, when the government used to control the price of basic goods, the current VAT Act is considered outdated and Finance ministers over the years increased the list of exempt goods to about 400.”

“You can subsidise through expenditure, but using taxation to subsidise is not a best practice so you better collect your revenue but ensure that you target the people that you think need to be targeted (to pay more tax).”

Capital gains tax

This was in reference to the capital gains tax, which would target those who benefit from transactions such as the sale of property, shares at the stock exchange or from annual dividends.
Cofek has opposed any move that could increase the food burden on Kenyans. “We’re opposed to it because that would go against President Kenyatta’s pledge to reduce the cost of living,” said Mr Stephen Mutoro, the lobby’s secretary-general.

Mr Mutoro said the lobby group was also uncomfortable with suggestions that the Bill was the handiwork of the International Monetary Fund and the World Bank.
The two institutions were reported to have been backing the Bill on the basis that it would boost the government’s internal sources of revenue.

Drafted in 2012, the Bill’s publication drew a barrage of criticism when it was first tabled and rejected in Parliament last year as it sought to introduce a 16 per cent tax on fertiliser, maize flour, bread, wheat flour, milk and other basic commodities plus books.
According to Saturday Nation calculations, the price of bread would have risen by Sh6, while maize flour would have risen by as much as Sh19. A packet of unga today sells for between Sh116 and Sh130. 
Reported by John Ngirachu, Caroline Wafula and Elisha Otieno