President Ruto: Nothing stops you from contributing to this fund, because it is not a tax.
Ayub Abdi: You say it is not a tax?
Ruto: It is not a tax.
Abdi: What is it?
Ruto: It is a contribution you are making, because it is not tax, this is not a tax, because, it is not a tax. It is your money.
Abdi: It is legally binding?
Ruto: Of course.
Abdi: It is not a tax, you said?
Ruto: It is not a tax
Abdi: Why should I contribute? And if I don’t want?
Ruto: That’s what the law says. It is a contribution you are making, because, it is not a tax.
Abdi: Why are you passing it?
Ruto: Because it is not tax.
Abdi: Why would I make contribution for others to succeed? It’s your business as government. As Head of State you have the responsibility, you have the mandate.
Ruto: And that’s why the Constitution gives me the power to tax.
Abdi: You are saying it’s not a tax!
Ruto: That’s why the Constitution gives me the power to tax. It is not a tax.
Abdi: There’s a Bill coming before Parliament. If it is passed, why would I have to contribute?
Ruto: Because it is not a tax.
A video clip on the above exchange between President William Ruto and Ayub Abdi of Citizen TV swiftly went viral on the Internet, becoming one of the main talking points as the President faced off against six journalists in the second of his live interviews from State House.
Usually calm and self-assured in front of TV cameras, Ruto this time seemed to have lost his way, struggling to justify the controversial housing scheme that proposes to dock three per cent from the salaries of all workers, with employers contributing an equal amount.
The compulsory scheme, which will apply to all, even those not interested in acquiring government-built houses, is being pushed through despite stiff opposition from both workers, already reeling under heavy taxation, and employers, who see it hitting their bottomlines.
Ruto laboured to explain, correctly, that the salary deduction was indeed not a tax, but merely a contribution just like the National Social Security Fund, and that the money was not going to boost the exchequer but towards a social housing programme. Contributors would benefit from the opportunity to purchase affordable houses, but if not interested would eventually get their money back, with interest.
He also added a patriotic element, suggesting that those with means have an obligation to contribute to a programme that benefits those in need of affordable housing, thereby helping people move up from slums to decent accommodation.
And finally, he added another justification that the programme would generate massive employment, thus pulling youth out of poverty. He claimed that Asian countries like Malaysia grew their economies and addressed unemployment through labour-intensive construction projects.He was not convincing, and it is clear that the President might be putting his neck on the block for what is an extremely hard sell.
While it is true that the contribution is not a tax, not many are bothered by the distinction because it does hit their payslips. The promise of affordable housing might not be a priority for workers buffeted from all sides by what is generally seen as the Kenya Kwanza administration’s insatiable appetite for new and increased taxes at a time everyone is feeling the pinch of a depressed economy.
It does not help that details on the proposed affordable housing project are extremely hazy in terms of project timelines, costs and payment terms, and intended beneficiaries considering the fact that those not in salaried employment will not be contributing.
The government also seems to be operating on the assumption that the menace of urban slums will be eradicated by provision of lowcost housing, while the reality might be that the problem is not a housing deficit, but unemployment and low earning.
Kenya, in fact, might provide many case studies of projects that are built supposedly to benefit slum dwellers, but turn out unaffordable for the presumed target, being taken up by the middle class instead.
The housing programme is just one of the minefields Ruto has to navigate at a period he is under pressure from all sides on proposed taxation measures that to many amount to trying to squeeze blood from a rock.
The President appeared at the interview well primed to face tough questions from Abdi and the other five Nancy Okware of KBC, Eric Munene of TV 47, Lofty Matambo of NTV, Daniel Kiptoo of K24 and moderator Eric Latiff of KTN/Spice FM.
Other than the ‘it is not a tax’ assertion coming out like a stuck record, he did demonstrate that he was very well prepared, having anticipated all the tough questions to be faced and probably having rehearsed his responses.
He came out very knowledgeable on the finer details of his development priorities and economic recovery strategy, reeling out an amazing array of facts and figures without reference to any notes.
He displayed almost missionary zeal and a firm conviction that he was on the right path despite the naysayers, and aware that he must take responsibility for politically risky measures that will inflict pain on Kenyans but are necessary if the country is to avoid looming economic collapse.
These include measures such as removing subsidies on fuel and maize flour, cutting government spending and even resisting further borrowing, to the extent that public service salaries were delayed last month for the first time in history. But the interview also showed a Ruto who was quite liberal with double-speak as well as unapologetic shifting of positions and policy U-turns.
On the economic black hole inherited from the Uhuru Kenyatta regime, the President started off by asserting that he would not find excuses in blaming his predecessor, a pointed reference to the Kenya Kwanza talking points frequently enunciated by Deputy President Rigathi Gachagua.
But the moment he was cornered on his contentious taxation proposals at variance with his campaign pledges, he fell back to emphasising the dire financial situation he found on assuming office.
From his responses, one would be forgiven for assuming that Ruto was the outsider who had no idea of the size of government’s external and domestic debt and the parlous state of government finances.
A stranger watching the interview would have had no clue that he was the Deputy President of two terms who toured the country taking credit for the very projects responsible for ballooning debt.
The only time he referred to his time in the DP’s mansion was in the claim that in the later stages of the Jubilee Party administration’s term, his office was denied funding and he had to dip into his own pocket to fuel official cars and pay staff allowances. None of the interviewers followed with a question on
whether he might have exhausted the budget allocation by going out on the campaign trail.
He also displayed a clear contradiction in supporting reduced taxation for aircraft and spare parts, arguing that Kenya’s place as a repair and service hub for the entire region was in danger of being lost to neighbouring countries unless incentives were offered to the industry. At the same time, however, he supported increased taxation on fuel on the basis that differential tax regimes were units and open to abuse. He also supported the contentious doubling on VAT of petrol on the grounds that the enhanced revenue would be critical to supporting road development projects that are presently in danger of stalling due to lack of funds.
Ruto further addressed issues around government appointments tilted towards Kenya Kwanza faithful and regions or ethnic groups that voted for him.
He insisted that meritocracy rather than political considerations was the key factor.
He gave the example of the new Chief of Defence Forces, Gen Francis Ogolla, who got the nod to succeed Gen Robert Kibochi despite the fact that he was amongst the National Advisory Security Committee members who allegedly tried to overturn his election victory by putting pressure on the Independent Electoral and Boundaries Commission at the tail end of the electoral process last August.
Gen Ogolla is increasingly being held up as a poster boy for Kenya Kwanza inclusiveness, with Gachagua also pointing out on more than one occasion that he got the top military job despite hailing from opposition leader Raila Odinga’s ethnic bastion.
And from there, a related question that Ruto tried very hard to parry was on Gachagua’s oft-repeated contention that the Kenya Kwanza administration is a ‘shareholder’ government where jobs and other dividends will be reserved for those (presumably in reference to ethnic origin, who voted for the winning coalition).
That was the one question across nearly three hours of the interview that Ruto tried hard to deflect, refusing to say whether or not that was the party position. He suggested instead that the question be posed to the Deputy President who, he said, was more than capable of speaking for himself.
And that perfectly illustrated the difficulties Ruto faces with the discordant messaging that is in many ways becoming the hallmark of his administration, despite a surfeit of communication directors, spokesmen and specialists at State House and every government ministry.