The National Assembly Finance and National Planning Committee have rejected several tax measures proposed on maize floor, LPG gas, betting and monthly pension payment.
The committee resolved to scrap off the taxes while reviewing the Finance Bill 2020 on Thursday, June 18, 2020.
LPG
This raft of measures is set to offer relief to Kenyans who were expected to pay Ksh 300 more for cooking gas following the introduction of the 14 per cent value-added tax on liquefied petroleum gas (LPG).
The committee argued that the tax proposed by Treasury CS Ukur Yattani would hurt Kenyans and also hinder President Uhuru Kenyatta's push for clean energy use in the Green energy investment project.
Cheaper Maize Floor
The committee directed the Finance Bill 2020 be amended to have the supply of maize and wheat flour moved from the exempt category to zero-rated items.
This will cushion Kenyans as they won't incur additional costs charged by maize suppliers.
“The Bill be amended in clause 11 by deleting paragraph 108. The amendment is intended to make flour cheaper and affordable,” Kipkelion East MP Joseph Limo, who chairs the committee stated.
Monthly Pension
The committee assured retirees that their pensions won't be charged as earlier proposed.
“The amendment is intended to retain the exemption for income of the National Social Security Fund (NSSF). The deletion of the amendment is intended to protect the benefits of members of the NSSF,” noted the Committee.
Betting
Perhaps one of the most affected industry in terms of taxation. Taxes initiated on betting companies led to the closure of top firms Sportpesa and Betin.
This led to massive unemployment as many employees were rendered jobless and billions of shillings lost in revenue.
"The 20 per cent excise duty charged on the stake placed by a punter has hurt the local gaming industry," the committee stated.
“The amendment is to remove excise duty on betting. This is to reverse the negative effects of this tax on the industry, which has led to the closure of betting firms in Kenya yet international players continue to operate,” the House committee proposed.
Fuel and Beer Taxes
The committee further proposed taxes on fuel, bottled water, juice and beer to be incurred after approval by parliament, instead of the Kenya Revenue Authority (KRA) imposing the tax by itself.
Under the current law, the KRA Commissioner-General issues a legal notice stating the adjustment for any good for it to become effective.
Under the new proposal, KRA will seek the green light from the Treasury CS before making adjustments.
The legal notice will then be presented taken to Parliament within seven days of publication.
Parliament will then be accorded a timeline of 28 days to approve or reject the adjustments.
MPs will vote on the recommendations of the committee in mid-June 2020 before President Uhuru Kenyatta signs the Finance Bill 2020 into law.
