Speaker Muturi rejects plans to reduce taxes on bread and gas further

Friday, June 25th, 2021 00:00 |
National Assembly Speaker Justin Muturi. Photo/PD/File

Kenyans will have to wait longer to celebrate a reduction of prices in basic commodities after Speaker of the National Assembly Justin Muturi  (pictured) turned down further amendments proposed by MPs in the Finance Bill.

The Finance Committee had earlier in the week rejected proposed measures that saw taxes on basic commodities such as Liquefied Petroleum Gas (LPG), maize flour and bread rise. The move was to cushion Kenyans from an increase in prices.

However, Nominated MP David Sankok’s move to further cushion Kenyans from high prices of bread and maize flour was thwarted yesterday.

Sankok had moved an amendment seeking to have maize and wheat seeds zero rated to make bread and maize flour cheaper. 

The MP had argued that zero rating bread and maize flour without addressing the price of seeds and other inputs will not reduce the prices as anticipated. 

He also sought to have the items removed from the control of the National Treasury and their prices determined by forces of demand and supply.

Dagoretti South MP John Kiarie had also proposed an amendment seeking to exempt petroleum products from the current 8 per cent VAT and to postpone the implementation of the 16 per cent VAT on LPG from the current proposed date of July 1, 2021 to July 1, 2024.

Far-reaching implications

Muturi said the Treasury had recommended that the House should not consider the amendments.

“In making the recommendation, the Committee notes that if implemented, the proposals would have far-reaching implications on revenue collection and would greatly affect the implementation of the national budget, and indeed the financing of the Appropriation Act 2021, which was passed by the House on Tuesday,” Muturi said in his communication to the House.

The committee, chaired by Homa Bay Woman Rep Gladys Wanga observed the net effect of the amendments by the MPs will be to reduce revenue collection, which will in turn have a negative effect on the implementation of the national budget.

Cabinet Secretary Ukur Yatani had proposed to raise VAT on bread, which was rejected by the committee in the Finance Bill, 2021.

More on News