Members of Parliament from the political divide have promised to shoot down plans to levy Value Added Tax (VAT) on flour, the country's staple food.
The proposal contained in the Finance Bill, which MPs on Tuesday resolved to fast-track , proposes to delete from among VAT-exempt goods, maize flour, cassava flour, wheat, and meslin flour.
Currently, the product is zero-rated, with a two-kilo packet of maize flour retailing at an average price of Sh128 while that of wheat is going for Sh170.
Zero-rated goods are exempt from VAT and currently this include maize, wheat and cassava flour. This is mainly because they are leading contributors to other manufactured goods and a significant component of a broader supply chain.
The introduction of 16 per cent VAT on flour will push the price of two-kilo maize flour to Sh150.
This is likely to make ugali unaffordable to households already reeling from the high cost of living.
A packet of wheat flour on the other hand will rise to almost Sh200 if VAT is slapped on the product.
Yesterday, Minority Leader in the National Assembly John Mbadi said they will shoot down any attempt to hike the cost of living.
"The National Assembly cannot participate in any effort that would result in an increase in the prices of basic commodities. Our members at the Finance Committee are under instruction not to accept any such proposal," Mbadi said.
Legislators supporting Deputy President William Ruto also criticised the government's proposal, with the former Majority Leader Aden Duale saying it's punitive
''I have not seen the tabled document. I want to be sure that this government is not playing hide and seek with the life of Kenyans,'' Duale told a media briefing on Wednesday.
On Sunday, Kikuyu MP Kimani Ichung’wa said they [UDA] will do what it takes to kill the proposed laws.
“We will not pass the Finance Bill you have brought before the National Assembly that is meant to raise the price of flour, milk, bread and bodaboda,” Ichung’wa said.
In case the proposed law is passed in its current form no VAT would be charged on unga until six months after the signing of the Finance Bill, 2022 into law by President Uhuru Kenyatta.
“This is provided that this paragraph shall be in operation for a period of six months after assent,” the Bill reads.
This would mean that the VAT would be charged on unga from November this year, assuming the President signs the bill into law by May 1.
Majority leader Amos Kimunya said the legislation was being fast-tracked to allow the Finance Committee chaired by Homa Bay MP Gladys Wanga to act on it during the short recess beginning next Thursday.
The committee is expected to receive views and memoranda on the Bill from Kenyans interested in the amendments.
In the proposed law, motorcycles – largely used by bodaboda riders – other than ambulances and locally assembly bikes would attract a duty of Sh13,404.64 per unit from the present Sh12,185.16.
The Finance Bill also seeks to increase excise duty on fruit juices, and vegetable juices from Sh12.17 per litre to Sh13.30 per litre.
Duty on cosmetics and beauty products would be charged at 15 per cent from the current 10 per cent, new charges which come into force on July 1.
Bottled water and other non-alcoholic beverages – not including fruits and vegetable juices – would attract a duty of Sh6.60 per liter from Sh6.03.
Beers, mixtures of fermented beverages of an alcoholic strength not exceeding 6 per cent per volume will increase from Sh121.85 per litre to Sh134.
Wines and other alcoholic beverages obtained by fermentation of fruits would attract a duty of Sh229 per litre should MPs approve the bill, an increase of Sh21.
Spirits and other spirituous beverages exceeding six per cent would be charged excise duty at Sh335.30 per litre.
Cigars, cheroots, cigarillos with tobacco and substitutes would attract a duty of Sh13,296 per kilo from the current Sh13,906 per kilo.
Cigarettes with filters would attract a duty of Sh2,752.97 from Sh2,502.74 per mille while other manufactured tobacco and substitutes would attract a duty of Sh10,707.88 per kilogram.
Imported sugar confectionary will be charged a duty of Sh40.37 per kilo from Sh36.74 while chocolate, chocolate in blocs, slabs and bars would be charged Sh242.29 per kilo.
Electronic cigarettes and other nicotine delivery devices would be charged an excise duty of 40 per cent while liquid nicotine for electronic cigarettes at Sh70 per millilitre.
Ice cream and other edible ice will attract duty at 15 per cent.
“Excise duty on fees charged on advertisement by television stations, print media, billboards, and FM radio stations on alcoholic beverages, betting, and gaming competitions shall be charged at 15 per cent,” the bill reads.
Duty has been removed for fertilised eggs imported by hatcheries, neutral spirit used by pharmaceutical manufacturers, and locally manufactured passenger motor vehicles.
