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Mudavadi warns Kenyans on tough economic times

Prime Cabinet Secretary Musalia Mudavadi has asked Kenyans to accept the proposed Financial Bill.

Speaking on May 24, 2023, during the opening of the Institute of Certified Public Accountants of Kenya (ICPAK) seminar in Mombasa, Mudavadi admitted the government is struggling and warned it could take two years to stabilise the economy.

“There are no easy solutions, it will hurt us for about two years but in the long run, the cost of living will go down. Measures taken by the government to resuscitate the economy are painful but they are credible,” said Mr Mudavadi.

“There is no room to lie to Kenyans, we all know things went bad before Kenya Kwanza took over and are bad today, this experience should prompt us to work together to mitigate the dire situation.”

However, he said as a government they are deploying measures to address challenges faced by citizens to foster a resilient and inclusive economic recovery that protects their (citizens) livelihoods.

“As a government we are not sleeping on the job, we are burning the midnight oil to correct the drain and strain on people’s livelihoods,” said Mr Mudavadi.

The Prime Cabinet has been urging Kenyans to brace themselves for tough times claiming that the Kenya Kwanza government inherited a ‘dead’ economy.

“Kenyans should understand and be wary of the fact that turning around the economy takes time. It is not going to be like instant coffee. We need to brace ourselves for tougher times, but there is hope. It is going to be tough before it gets better.”

His sentiment comes at a time when the prices of commodities such as maize flour (unga), sugar, bread and petrol have increased.

The Finance Bill includes controversial clauses that will increase taxes on Kenyans.

This includes an increase in Pay as You Earn (PAYE) from 30% to 35% for Kenyans earning over Sh500,000.

Kenyans across the board will also be required to pay 3% of their salary towards the Housing Fund. An employee will also be asked to top up with a similar amount with the money diverted towards building affordable houses for Kenyans.

The Finance Bill also proposes tax on fake hair and nails amongst other items.

There is also a proposal to increase Value Added Tax on fuel from 8% to 16%.

Content creators will also be taxed 15% of their income.

The Bill will be discussed in Parliament before it is adopted or rejected ahead of the 2023/2024 budget reading.

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