Prof Ndung’u: With rising poverty, this is not the time to increase taxes
The vetting of President William Ruto’s cabinet secretary nominees entered its second day on Tuesday with Prof Njuguna Ndung’u, the nominee for national treasury and planning docket appearing before the MPs.
The session was a test of courage for the former Central Bank of Kenya (CBK) governor who braved the hot seat responding to legislators’ questions regarding his plan to redeem the country’s ailing economy.
Most of the queries centered around Prof. Ndung’u’s plan to iron out the funding crisis facing Dr Ruto’s new government as it strives to bridge a Kes862.5 billion budget deficit while simultaneously keeping pace with Kes1.36 trillion debt due in the fiscal year ending June 2023.
Prof. Ndung’u substantiated his preferred tax policy which will assist the administration increase tax revenue without piling more burden on the taxpayers.
“In a dire situation when poverty is biting and the cost of living is rising, that is not the time to increase or retarget taxes. That’s the time to look at areas where you can provide interventions,” said the Professor of Economics.
He touted the Kes50 billion ‘Hustler Fund’, which is set to be rolled out in December, as one of the interventions that will help liberalize markets through broader inclusivity and loosen the grip of elites on the market in favor of low income earners who are sabotaged by market captors.
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“The poor work hard in the market they participate in but the market is captured. That elite capture diminishes the economic rent that we should otherwise get,” explained Prof. Ndung’u.
He also rooted voluntary taxation using the Retail Electronic Payments arguing that it eliminates in-person interaction between the taxman and taxpayer and had proven effective in other jurisdictions.
“We have seen in one of the papers that I have prepared in the last two or three years that some of those taxes that utilize [Retail Electronic Payments] are actually performing much better,” he said.
If the Parliament approves Prof. Njuguna Ndung’u for the treasury role, he will be vested with power to effect whatever policy changes he sees fit in his quest to rescue the economy from the perils of high inflation, debt distress and budget deficit.
