The fact that such far-reaching restrictions on movement, work, were announced without any financial relief measures in place, really tells you just how disconnected policy making in GoK is, from the reality of millions of citizens.
At the very least, for example, tax incentives should have been restored in an emergency house session. If you’re a hotelier, or a restaurant who was banking on Easter traffic to catch up on your obligations, you’re doubly screwed.
What happens to this sector?
It was not impossible, or difficult, to get the Majority & Minority Leaders, CS Treasury, Budget & Finance Comm Chairs + KEPSA, private sector reps, in one room to thrash out a support package ahead of these restrictions.
But this did not happen. Why?
Politicians running around with large crows in tow with no serious consequences for holding such super-spreader events = sending a message that there are 2 sets of rules in #Kenya. One for citizens, one for folks on the public payroll.
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The fact that bodies like @CAA_Kenya have to make clarifications hours after directives were issued is just one more bit of evidence of either:
[1] really poor inter-govt communication.
[2] an absence of common sense planning.
Or both.
That imposing a limitation on movement in so short a time frame would cause confusion, mayhem, trigger price spikes was wholly foreseeable & avoidable.
So why proceed to do it and leave other parties scrambling to figure out what's allowable & what isn't it?
Why?
🤦🏾♂️🤦🏾♂️
Either way, it's one more chapter in the long, long book of "Communication Fails 101: A case study of avoidable, self-inflicted damage from East Africa."
First round of restrictions on movement and a curfew in 2020 was a hammer blow to the economy. Millions of jobs lost. Incomes drastically cut. At least back then, we had cuts in personal & corporate income tax, and a 200 bp reduction in VAT to soften the blow.
[1/n]
Remember, it wasn’t by accident that 57.7% of all bank loans in the country were restructured, per @CBKKenya data. If nothing else, that tells you there was a huge amount of financial stress that built up over 2020.
[2/n]
BUT.
[There’s always a ‘but’, isn’t there?]
Treasury asked MPs to end these pandemic tax cuts. Legislators agreed to reset personal, corporate income tax levels back to their 30% top rate, with adjusted bands, on 12/22/2020. That 200 bp cut in VAT? Also gone.
Uhuru Kenyatta: "Fellow Kenyans, we tend to forget quickly."
Uhuru Kenyatta: "You can always revive an economy, but you cannot revive a lost life."
But, politicians [himself included] have largely ignored the same pandemic restrictions he put in place.
#Kenya's President rationalizing the economic cost of the policies he put in place in 2020. Those policies, he says, prevented an average of 2000 lives per day, and average of 1 million cases by end of 2020.
[THREAD] I’ve done a speed pass through some of the highlights, plus the #labor, #health sections of #Kenya’s 2020 Economic Survey. Some observations to follow.
TAXES & DEBT
@KeTreasury’s forecasting total tax collection of KES 1 771.4 Billion by end June. By end March, tax collections stood at KES 1 119.99 Billion.
How can KRA can magically raise KES 651 Billion Shillings in April, May and June. Seriously?
[2/n]
That’s approximately KES 217 Billion, each month, or nearly twice the average monthly collection [KES 124 Billion] between July 2019 and March 2020.
From an economy where consumer spending has drastically contracted. In the middle of a pandemic.
Health CS: "To the police, the people should be treated humanely. However, we are not going to hold back on the enforcement measured we have so far instituted."
Kenya's Health CS appeals to Kenyans to minimize contact with the police.
Comment: But when essential staff are being beaten by folks who are behaving like thugs in uniform, how is this adding value to the fight against #COVID19? 🤦🏿♂️
7 new confirmed cases of #COVID19, by #Kenya's Health CS. Total case count stands at 38, as of March 28.
In order to provide jobs and provide some certainty for employers and their employees, Kenya's President orders:
[1] Treasury to move to parliament to seek 100% tax relief for anyone making up to KES 24 000.
[2] Reduction of the top Personal Income Tax rate from 30% to 25%
[3] Reduction of the top rate of Corporate Income Tax from 30% to 35%.
[4] Reduction of turnover tax rate from 3% to 1%. Covers MSMEs.
[5] Appropriation of KES 10 B for the elderly, orphans and other vulnerable groups, to be distributed via cash transfers.
[6] Temporary suspension of CRB listing of any person, MSME, and even corporate entities whose loan accounts fall due or is in arrears from April 1 2020.