The National Treasury and Planning Cabinet Secretary Ukur Yatani has stated that the Financial Year 2021/2022 budget will be based on “building back better” with strategies for resilient and sustainable economic recovery.
On Thursday afternoon, the treasury boss is expected to table the Kshs. 3.6 trillion spending plans and tax measures for the next one year, in a bruised economy where revenue collection remains subpar amid widening deficit and mounting debt.
As at the end of March this year, public and publicly guaranteed stock of debt amounted to Kshs. 7.34 trillion even as Treasury projects total revenue in the financial year 2021/2022 to amount to Kshs. 2.04 trillion shillings with ordinary revenue constituting Kshs. 1.8 trillion.
However, to many Kenyans in informal employment who have experienced the wrath of the pandemic, the plea is for CS Yatani to consider lowering taxes on essentials goods that have stretched their household budgets to the limit.
Kennedy Omondi, a matatu driver has witnessed the first hand effects of COVID-19 in the transport sector.
Since announcement of first case of the disease in March last year which resulted deployment of social distance rules in the public transport which ferries millions of consumers and employs thousands more, Omondi says life has not been easy.
“Before covid, I used to do 15 trips and make money. But now, I only do six trips even after starting at 4Am,” says Omondi is a lackluster tone as he waits to pick commuters from Nairobi’s Central Business District to Komarocks Estate.
“We used to make Kshs. 8000 per day but now we can barely make Kshs. 4000. With that even paying for service or even insurance is difficult.”
It is said the earliest bird catches the worm, however for Omondi, that is not guaranteed in the current pandemic period where number of passengers in a public transport is capped, fuel prices hiked and commuters seeking cheaper means of travel.
“These days I can barely make Kshs. 500 a day after paying the vehicle owner and the conductor. Life has become difficult because even paying rent is stressful. The money is not enough, cost of living has risen and even the fuel is expensive.”
Like thousands of others in informal employment, Omondi pleads, “they need to consider the common man in this budget because food prices have gone up and because schools are opened, school fees is also needed. Sometimes you wonder what to tell the children because the cost of living is too high.”
Data from the Kenya Bureau of Statistics (KNBS) indicate that the rate of inflation in May rose to 5.87% year-on-year compared to 5.33% during the same period last year.
KNBS further indicated that in a year to May 2021, the price of a litre of petrol rose 50.40%, from an average of Kshs. 84.58 to the Kshs. 123.66.
Just like Omondi, Leah, a shoeshine lady in Nairobi is also in the same predicament.
Over the last one year, she says she has seen a drastic decline in income and clients who want to be attended to.
This could be largely attribute to covid measures which saw many companies and workers embrace remote working.
“I just want him (Yatani) to ease taxes on maize flour, sugar and fuel because the cost of basic goods have gone up and I hardly make enough to meet my dailycost o expenses,” said Leah.
Last year, as part of the economic stimulus programme, treasury reduced Value Added Tax from 16% to 14% to cushion many especially low income earners from adverse effects of COVID-19.
The tax measure was reverted on 1st January 2021.
United Nations in its report on the impact of Covid on women, stated that as women take on greater care demands at home, their jobs will also be disproportionately affected by cuts and lay-offs
“The situation is worse in developing economies where the vast majority of women’s employment – 70 per cent – is in the informal economy with few protections against dismissal or for paid sick leave and limited access to social protection,” said UN.
Leah further urges for the National Treasury to avail low interest loan to women to support small businesses.
“If they give us money to start business, it will help us as women to grow our businesses because some of us have husbands who lost their jobs and we are now forced to step in.”
Federation of Kenya Employers estimated that at least 5.1 million Kenyans in the informal sector lost their jobs between in six months to August 2020.