MPs on Tuesday rejected Treasury Cabinet Secretary Ukur Yatani’s proposal to raise VAT on bread.
The Finance committee, chaired by Homa Bay Woman Representative Gladys Wanga, recommended that provisions to raise VAT on bread be deleted from the Finance Bill, 2021.
The proposal sought to impose higher taxes on bread, motorcycles, imported jewellery, betting and nicotine pouches to fund President Uhuru Kenyatta’s Sh3 trillion budget.
The committee team shot down some of the proposals, citing the economic tough times.
MPs want zero-rated taxes charged on the supply of maize flour, cassava flour, wheat and maize flour containing cassava flour.
“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,” the committee said in its report tabled in the National Assembly on Tuesday.
“The committee supported to retain the zero-rated supplies to ensure that the price of ordinary bread is not affected.”
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.
“The committee is unanimous that we support the boda boda industry, which has employed many Kenyans. We felt there was a need to understand the proposal further,” Wanga told the House.