Member of Parliament have rejected the imposition of tax on bread, flour and the variation of excise duty on imported motorcycles.
The National Assembly Finance and National Planning Committee chaired by Homa Bay Woman Representative Gladys Wanga, said that the proposed amendments are intended to cushion the poor who are facing hard times.
The committee supported to retain the zero-rated supplies of bread arguing that it will raise the cost of living on Mwananchi.
“Ordinary bread is a staple for most families today. We propose this to remain zero-rated because even if you say you are moving it to exempt, the cost will be put on Mwananchi through the raising of the cost of bread,” said Wanga.
She argued that bread is consumed by a majority of Kenyans who are already struggling with the negative current economic climate as a result of the Covid-19 pandemic.
They further argued that the subsequent increase in the price of bread ran counter to the government’s Big Four agenda pillar on food security.
The lawmakers have also recommended that the proposed 15 per cent excise duty on motorcycles be deleted from the bill.
They argued that the boda boda industry has contributed to the employment of youths in the country.
“The Committee is unanimous that we need to support the boda boda industry which has contributed significantly to youth employment,” added Wanga.
The lawmakers said that they fear that vendors might take advantage of the change to overcharge buyers.
Additionally, they team wants locally manufactured confectionery to remain exempt of excise duty while raising the effective rate of excise duty on imports from Sh.20 per kilo to Sh.35.
Treasury Cabinet Secretary Ukur Yatani imposed higher taxes on bread, motorcycles, imported jewellery, betting and nicotine pouches to fund President Uhuru Kenyatta’s Sh3 trillion budget.
The new taxes aim to boost Kenya Revenue Authority’s revenue collection to hit a target of Sh1.78 trillion in the current financial year which ends June 30.
treasury’s attempts in recent years to grow the tax base through measures like introducing the turnover tax that targeted small businesses and rental income tax.