With this tax system, Hustler Fund will fail

The development of a country is anchored on the system in place to revitalise socio-economic development, thus benefiting the majority in need.

The Kenya Kwanza administration's introduction of the second phase of the Hustler Fund was good. The loan of Sh50,000 to Sh1000,000 will stimulate borrowing by hungry citizens who want to boost their income-generating activities and meet other needs.

A recent report by the UN World Food Programme shows that more than 5.6 million Kenyans are at risk of starvation and suffer from inequitable distribution of resources. It says poverty levels have risen sharply as disposable incomes have fallen due to retrenchment by employers, including the government.

This is a cause for concern. If nothing is done, most people will be thrown into poverty. The Hustler Business Fund, despite its favourable terms, won't help much because profits will be subject to high taxes.

In a country where businessmen need more than 50 licences for a single unit, the abolition of the extortion systems will lead to more businesses being set up; high taxation is a recipe for liquidation. Medium, small and micro enterprises are usually hit hard by competition from established businesses.

While the affordable housing project contributes to development, Kenyans desperately need food, clean water and healthcare. With such inflationary trends, how will borrowers afford construction materials? Who benefits - the government or ordinary citizens?

Singapore worked out what would work best for them and it worked. You cannot double tax employers and expect things to calm down. Instead, we will see retrenchment or stagnation in production due to the financial constraints that companies will face.

Kenya will only realise its potential with realistic and achievable resources and draft development plans. The housing plan is good, but the timing is wrong. The priority now is to reduce the cost of living.

The government should ensure political friendship to promote development. Peace is important. The opposition will win on the streets because everyone is crying out against low purchasing power and lack of public services.

Aloys Michael, Kisumu