President Uhuru Kenyatta addressed the Finance Bill 2018/19, stating it did not meet Kenya's legislative aspirations and required modifications. He emphasized the importance of devolution and investments in infrastructure, healthcare, and social programs, while proposing a reduction in VAT on petroleum products to alleviate citizens' financial burdens. The president highlighted the need for budget cuts and austerity measures to ensure responsible fiscal management and effective use of tax revenues, aiming for sustainable development and prosperity.

1. Statement
by
HisExcellency
Hon.UhuruKenyatta,C.G.H.,Presidentofthe
RepublicofKenyaandCommander-in-Chiefofthe
DefenceForces
OCCASION:FinanceBill2018/2019
VENUE: STATEHOUSE,NAIROBI
DATE: 14thSeptember,2018

2. 1. FELLOW KENYANS,asyourPresident,Ihavea
constitutional duty to ensure that legislative
instrumentspresentedformysignatureconform
to ournationalaspirations,fulfilgovernment’s
basic obligations to our people, and are
implementable.
2. The Finance Bill2018/19 broughtto me
yesterdayfellshortofthisthreshold.Itprotected
thestatusquoandsacrificedthebiggervision.It
took the easy path,instead ofrising to the
challengesofourtime.Itwasgoodpolitics,but
badleadership.
3. Asyoumightknow,IreturnedittoParliament

3. withanumberofmodifications,designedtocure
these shortcomings. The 2010 constitution
widened Kenya’s democratic space; it also
fundamentallyalteredthestructuresandfunctions
ofgovernment.Withit,wehaveseenasubstantial
increase in political and bureaucratic
representationateverylevel:wenow havetwo
housesofParliament;theNationalAssemblyhas
grownfrom 290to349members;andournew
Senatehas67electedandnominatedmembers.
Wealsohaveforty-sevengovernors,forty-seven
deputy governors,and forty-seven new county
assemblies–inwhichsitmorethanathousand

4. MCAs.
4. Additionally,we have sixteen independent
officesandcommissions,excludingthejudiciary.
Asyoucansee,theenjoymentofournewrightsis
expensive,unprecedentedlyso.
5. Weareveryproudofthespeedwithwhichwe
have implemented the new constitution,and
devolved government to the people. Having
transferred over a trillion shillings to county
governments since 2013,we have seen major
improvements in service delivery, and
improvementsinthelivesofKenyans.

5. 6. That’swhywewillcontinuetoprotectand
entrench devolution and the new constitutional
order,notwithstandingthecost.
7. Inadditiontosupportingdevolution,yourtaxes
havebeenusedforanaggressiveandsuccessful
developmentagenda.
8. Today,millionsofKenyanstravelonnewroads
builtby this administration;others are under
construction. Millions of homes have been

6. connectedtoelectricity.Ourmothersnow have
accesstosaferandcheapermaternalcare.
9. Inadditiontofreeprimaryeducation,parents
can now send theirchildren to daysecondary
public schools, for free. Our investment in
infrastructureisatitshighestsinceindependence.
IwishtoremindKenyansthattheMoUbetween
KenyaandtheUnitedStatesofAmericafordirect
flightswassignedin2008;itisonlynow,after
consistent investment in Jomo Kenyatta
Internationalairportundermyadministration,that
thefirstdirectflighttoAmericaisareality.

7. 10.And theStandard GaugeRailwayhasbeen
nothingshortoftransformational.Builtinrecord
time,ithasmovedmorethanamillionpassengers,
andhauledmillionsoftonsofcargo.
11.Onthesocialfront,wehavemorethandoubled
thenumberofpeoplewithaffordableaccessto
healthcareunderNHIF.Inaddition,vulnerableand
elderlyKenyans–morethan700,000ofthem –
now receivemonthlystipends.Butallthiscosts
money.Yourtaxeshavepaidforclear,tangible
progress;thisdevelopmenttrajectorywillpropel
ourcountrytonewheightsofprosperity.
12.Fundingdevolutiontothetuneofover1trillion

8. shillingssince2013isabolddecision.Building
ambitious railand road infrastructure thatis
unparalleled in our region is bold. Fighting
corruption and demolishing illegalstructuresis
boldtosomeandunpopulartoothers.Initiating
major social-protection programmes for our
vulnerableandelderlyisbold.Allofthiswehave
donewithoutanysubstantialincreaseintaxes.
13.Now Iwilladdress the VAT on petroleum
products.ButbeforeIdoso,Iwanttomentiontwo
things. Reforms to VAT taxation were first
introduced in theVAT Actof2013.Underthe
transition arrangements passed by Parliament,

9. certaingoodsincludingpetroleum productswere
tobeexemptfrom VAT,toallow forthegradual
implementationofthenew tax.Thisexemption
wastoexpireinAugust2016butwasextendedfor
afurtherperiodoftwoyears,totheendofAugust
2018.
14.Thepurposeofthistaxwassimple.Wehave
topayforthenew constitutionalorder,andthe
publicservicesonwhichKenyansdependalike.
These cost money. Further delay in the
implementationofthetaxwouldcompromiseour
abilitytodeliverbasicservicestoKenyans,andto

10. maintainthetrajectoryofourdevelopment.
15.FellowKenyans,Ihavespentthelastfewdays
listeningtoawidecross-sectionofviews.Itis
clearthatyouarealltroubledbytheeffectofthe
riseinthepricesofpetroleum products,andits
impactonthecostofliving.
16.Ihaveheardandunderstoodyourconcerns,
which iswhyIhave proposed,aspartofmy
memorandum,tocutVATonpetroleum products
by50%--from16%to8%.
17.ShouldParliamentacceptthisproposal,the
priceofsuperpetrolwilldropfrom KSh127to

11. aboutKSh118,andthepriceofdieselwilldrop
from KSh115toaboutKSh107.Justasbusiness
ownerstookthenewVATrateasanopportunityto
increasethecostofgoodsandservices,Iexpect
them nottotakeadvantageofwearycitizens,and
tolowertheirpricescommensuratelyandwithout
delay.
18.Butwestillfaceafinancinggap.Thismeasure
willnotsufficetobalanceourbudget,asrequired
bylaw.Therefore Ihave also proposed wide-
ranging cuts in spending as wellas austerity
measuresacrossallarmsofgovernment.Thecuts
targetlessessentialspending,suchashospitality,

12. foreignanddomestictravel,trainingandseminars,
andsimilarcategories.
19.Thesebudgetcutsaskofusingovernment
thatwetightenourbelts.Italsoensuresthatthe
sacrifices made by tax-compliantKenyans are
matchedbydisciplinefrom allofusinthepublic
service.
20.IwanttoassureKenyansthattheirtaxeswill
beusedwell.Thatiswhy,inmymemorandum,I
proposetoincreasetheresourcesavailabletothe
institutions entrusted to fight corruption.
Specifically,Ihave increased funding to the
judiciaryto speed up thecompletion ofcases

13. concerning corruption and economic crime.
Further,Ihave increased the allocation to the
OfficeoftheDirectorofPublicProsecution,andto
theinvestigativeagencies.Iexpectthesebodiesto
worktogethertohelpusrestoreourfaithinpublic
institutions.
21.AsPresident,itismyresponsibilityto put
Kenyansfirst,thoselivingtoday,andyourchildren,
whowillinheritthecountrytomorrow.Thatmeans
Imustbalancebetweenshort-term painandlong-
termgain.
22.Fellow Kenyans, we have a country to
transform,andwemustmakebolddecisionsto

14. achieveourvision.IaskKenyanstojoinhandsand
work togetherforus to achieve this common
visionofafree,just,democraticsocietywithlong-
termsharedprosperityforall.
23.Thankyou.GodblessKenya.