🧵Folks, something doesn't add up for me. Kenya's KK administration and it's leadership posts lowest approval ratings and yet there's a public reluctance in supporting privatization of State Owned Enterprises. 1/7 Part of the reason that privatization should be supported is because after the transaction, the role of the state and it's red sole shoe wearing cronies will have reduced access to the gravy train. 2/7

Folks, it is not true to say that if a Court declared a Finance Act invalid, then the government has no basis for taxation. It is an embarrassment to make such a statement. Why? 1/N The foundation of all taxes collected in Kenya lies in law i.e. 2/N
(a) The Income Tax Act (both corporate and PAYE)
(b) The VAT Act
(c) The Excise Duty Act
(d) Customs and Excise Tax Act

All passed by parliament under Article 210 of the Constitution.

What is it with Kenyan presidents and their tendency to make the most uneducated comparisons between this country and Japan? It is disingenuous, even mendacious, to compare the tax revenues to GDP ratios for countries where one has average incomes 16 times higher? 1/5 Comparable Per Capita Incomes in 2024 in US$ (Current Prices )

Kenya = US$ 2190
Japan = US$ 34550

2/5

🧵 Folks, the privatization of state-owned enterprises is a good policy, even if it is being pursued by a government that seems to be unpopular and which certainly is not trusted for financial probity. 1/N Do not read the asset values of the firms as equivalent to the market value of these "parastatals". One needs to account for their liabilities, many of which are hidden and will surprise us all when proper due diligence is conducted. 2/N

🧵Folks, please stop saying that " We dont have a problem with any tax that government imposes". This may be politically correct, but it shows a concession that even the constitution does not allow. #IEAKEBudget2023 1/N We should not have to live in poverty so that GoK becomes rich. That's a trade off that does not improve welfare. #IEAKEBudget2023 2/N

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

Budget Theme : "Bottom Up Economic Transformation and Climate Change...... " Truly a mouthful 1/N #IEAKEBudget2023 5 Priority sectors #IEAKEBudget2023
1. Agricultural transformation
2. Transforming the MSE
3. Housing and Settlement
4. Healthcare
5. Digital Supehighway
2/N

🧵Folks, a fallacy that has taken strong foundation in Kenya's TV pundits is that countries are in an arms race to raise revenue as a share of GDP and that Kenya is doing badly by taking only 17% per annum. 1/N This claim is nonsense for two reasons:
1. Government claims on your income has an opportunity cost which makes you have less resources an shrinks the size of markets 2/N

Folks, do you know that the Kenya Vision 2030 states that by the year 2030, 60% (sixty percent) of Kenya's population will reside in Kenya's urban areas. And has a chart with projections to support it (page 119). 1/N That number will not be reached but it is part of the underlying claim supporting the drive for low-cost housing in urban areas. 2/N

🧵 Folks, I have tried to understand where sacred estimates of the housing deficit in Kenya come from and I remain unconvinced that the numbers presented are defensible. 1/N The Vision2030 (pp 119) started this claim of a serious housing deficit by arguing: " It is estimated that of a total of 150,000 housing units required annually in urban areas, only 35,000 units are produced". A bland claim with an unsupported source. 2/N

Folks, there are 3 PAYE levels applicable to monthly income in Kenya. The proposed Finance Bill would mean an additional one at 35%) 🧵
1. 0- 24,000 - 10%
2. Any > 24001 & <32333- 25%
3. All additional >32333- 30%
1/N So this means that there are 3 possible Marginal Tax Rates determined by the Income Tax Law. The MTR is the highest tax rate applicable to your income and these can only be the 3 above (10%, 25%, and 30%). 2/N

Folks, there is no serious policy scholar or economist who would tell you that there's an iron law about which profession or sector (engineer, finance, accountancy or physician) should be paid a higher wage than another. 1/N If you are curious about this, it may help to be acquainted with a basic microeconomics book on input markets (labor being one) and learn about the Marginal Product of Labour on the one side and relate it to scarcity. 2/N

Folks, this Season of Subsidies" is a cruel game of Bread and Circuses game being played by the Jubilee administration. 1/N Are you "Posh & Serious" people convinced GoK likes you so much that it is subsidizing your staple food and also fuel and that somehow, we are all better for it? 2/N

Folks, you recall that GoK started a programme that supported a Kenyan university in the assembly of notebook computers. 1/N I met someone who has used the Taifa notebook computer and said it didn't work for more than week before it hang. 2/N

Folks, parliament is passing out soon and it's work largely done. It is in the collective interest of all citizens to ask for declaration on which legislators have had any procurement contracts with any state corporation or arm of government during term. 1/N A new theory has just been thrown at me and it claims that in the future, we will find that the performance of each parliamentary term will be highly correlated to the number of legislators bearing government procurement contracts. 2/N

Folks, we live in a country that gives us economic rights including to control and exchange one's property according to the owner's judgement. 1/N Pray, why are the"Posh & Serious" applauding government for threatening form owners who "are alleged " to refuse to exchange their property at a controlled price? 2/N

Should GoK maintain the price stabilization fund for petroleum fuels beyond June 2022? Should parliament approve the proposal by the @KeTreasury to raise the excise tax on Nicotine used in E-Cigarettes from Kshs. 1 to Kshs. 70 per mg?

The total budget deficit is Kshs. 846B. This will be funded with Kshs. 260B from external and Kshs 583B from domestic borrowing. The borrowing training continues. #KEBudget2022_23 1/N Exemption from VAT for pharmaceutical products. 2/N

Folks, Kenyans may be bidding bye to a moderate tax country with sticky projects such as SGR, Superhighways to nowhere, and funds such as the stabilization fund for fuels. These projects make future claims to revenues and reduce budget flexibility. 1/N These funds, including the fuel price Stabilization Fund, have some features that make them difficult to roll back. They create a dedicate cadre of bureaucrats who will always try to justify their existence and they are available for use in unauthorized ways. 2/N

Folks, this is a simple matter. GoK manages the retail & wholesale prices of petroleum fuels through @EPRA_Ke formula. 1/N In the last 6 months, global prices have been rising and GoK committed to keeping domestic retail prices lower by instituting the "Price Stabilization Fund". 2/N

Folks, this tweet will sound harsh but the intention is to show the cluelessness among those "posh & serious" whose refrain is that county governments have received so much money and have not rid country of poverty. 1/N This chart below, drawn by @IEAKenya shows that all county governments are expected to receive a total of Kshs. 370 billion comprised of the equitable share and conditional grants. 2/N