The Law Society of Kenya (LSK) has challenged the National Assembly to remove the 16 per cent Value Added Tax (VAT) in maize and wheat flour in the proposed Finance Bill 2022.
The National Assembly is scheduled to commence hearings on the Finance Bill, 2022 proposing to increase prices of basic commodities amid protest from a section of stakeholders.
LSK warned it is not the time to tax Kenyans more and thus asked the committee to delete the proposals that will affect Kenyans.
In a memorandum, which it submitted to the committee for consideration, LSK president Eric Theuri raised concerns over the bill which it claims exemplifies an appetite for tax revenue and introduces taxation laws that literally squeeze out the life of the most struggling businesses.
Theuri said they have raised concerns with over twenty-two proposed amendments contained in the bill which they said are problematic and which if enacted will make the country highly unattractive as a business destination, as it will increase the level of unemployment and encourage the use of substandard or illegal products.
“The Finance bill 2022 inter alia exemplifies an appetite for tax revenues that will kill businesses, livelihoods and general welfare of ordinary Kenyans. The bill displays the increasingly pervasive tendency by the executive arm of government to introduce taxation measures that end up creating an environment that is not conducive for Kenyans and is in effect against its role of supporting the society, the economy and providing public service,” said Theuri.
“The right thing, in this case, is to amend the bill as appropriate and delete the proposals that will negatively affect the lives of the people they have been elected to represent.”
The Bill proposes to remove the tax relief that was afforded to suppliers of maize flour and wheat flour that will now attract 16 per cent VAT.
The Bill also proposes to increase taxes on motorcycles, cosmetics and beauty products, jewellery, beer, wines and spirits, chocolate and bottled water.
Parliament is seeking a public nod on the Bill which seeks to raise more funds to seal a Sh860 billion fiscal deficit, and bridge the gap in it’s Sh3.3 trillion budget.
Treasury proposed to increase excise duty on certain products by 10 per cent as part of the proposed new tax measures meant to help the government tap an additional Sh50.4 billion, in the 2022-2023 fiscal year.
The schedule of the hearings says legislators who sit in the Finance Committee are expected to meet close to 60 stakeholders between today and Thursday to pave way for a report expected to be tabled in the National Assembly next week to guide debate on the bill.
