Lawmakers reject Treasury move to impose VAT on essential goods

Thursday, April 23rd, 2020 00:00 |
Former National Assembly Leader of Majority Aden Duale. Photo/PD/FILE

Parliament last evening rejected a move by the National Treasury to impose Value Added Tax (VAT)  on essential items protesting that doing so this time will be burdening the already over taxed  Kenyans.

Members of the National Assembly dropped some of the amendments introduced by the Treasury in  the Tax (Amendment) Bill 2020, proposed by President Uhuru Kenyatta to cushion Kenyans against the coronavirus pandemic.

Led by the Majority leader Aden Duale, the MPs said introducing VAT to basic commodities will take away the gains made in the reduced VAT rates from 16 to 14 per cent.

“What Treasury is doing is taking away what it has given Wanjiku through the VAT reductions. We are giving with one hand and taking away with the other,” said Duale as members debated the motion yesterday.

The Finance Committee had voted against the proposed taxes levied on basic commodities such as milk, bread, pharmaceuticals, agricultural and pest control products.

The committee recommended that the products be zero-rated as this will cushion the common Kenyan during this period when most of them have been rendered jobless as a result of the effects of the pandemic.

Raise prices

The committee chairman Joseph Limo said Parliament will be seen to be insensitive if members approved the proposal introducing taxes to essentials such as bread, milk, agricultural inputs and medicines.

Liquefied Petroleum Gas (LPG) which was zero-rated has also been slapped with VAT which will push its price higher.

 “Imposing VAT on essential items as proposed by the Treasury will cause more problems to the already hard-hit Kenyans,” Limo said while moving the motion.

Limo said even as members support the government efforts to raise money to fund its programmes during these hard times, they had an obligation to protect the rights of the common man as their representatives.

“Even as we support efforts being made by the government to raise funds, we also need to address the needs of the common Kenyan,” added Limo.

He said his committee has also rejected the amendment seeking to impose VAT on fertilisers and farm implements which were zero-rated.

Minority leader John Mbadi hit out at the Treasury for taxing Kenyans who had lost their jobs and others facing pay cuts.

Treasury had in the Tax Laws (Amendment) Bill proposed the imposition of 14 per cent VAT for bread, milk, cream, cooking gas, fuel, mosquito nets, vaccines and a horde of medical products.

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