Thread by @IEAKwame

Folks, the last budget speech has some gems that reveal GoK's inability to present a coherent taxation policy. On the one hand, GoK is dedicating Kshs. 270M to expand sugar production 1/N #IEAKEBudget2023

And then claims later that sugar consumption is drivign up the pevalnece of diabetes in households and thereby justfoes imposition of an Excise tax equivalent to Kshs. 5 per kilogramme to cure this negative externality. #IEAKEBudget2023 2/N

Reading those two shows @IEAKenya realization that economic reasoning on tax policy has been abandoned for convenient use of instruments to achieve maximum revenue and even then they dont align objectives with the design. #IEAKEBudget2023 3/N

Example 2: In this excerpt, the cabinet secretary suggests that there is need to apply an excise tax on imports of fish products to protect Kenyan industry. This statement is staggeringly wrong both in principle and fact. #IEAKEBudget2023 4/N

Data from the Annual Report (2021) of the Kenya Fisheries Service shows that Kenya has a supply of 163,000 MT annually against a demand of ~500,000 MT. #IEAKEBudget2023 5/N

Imported fish accounts for 21000 MT and this is just about 5% of the deficit. Pray, what local production is the GoK proposing to protect through his measure? #IEAKEBudget2023 6/N

On principle, it is a statement of conceptual confusion (unbecoming of a professor of economics) to apply an excise tax as a trade protection measure. #IEAKEBudget2023 7/N

We think that @NAssemblyKE should fix this tendency to abuse the principles of taxation by applying Excise taxes liberally to items and services for which it is not suitable. #IEAKEBudget2023 8/N

I recoemnnd @IEAKenya fact Sheet on the budget for 2023 here. #IEAKEBudget2023 9/9
ieakenya.or.ke/?wpdmdl=3041