Members of Parliament have rejected proposals by the National Treasury to introduce VAT on basic food commodities such as maize and wheat flour, which would have seen the prices of such commodities go up sharply despite the current high cost of living.
In the Finance Bill 2022 tabled before the parliament by the Finance and National Planning Committee led by Homa Bay Woman Representative, Gladys Wanga, it was noted that Kenyans were struggling to make ends meet and the tax proposals would be an unnecessary burden.
Additionally, the committee rejected the VAT that was to be imposed on cassava which is used as an alternative to maize in some regions of the country.
The proposals were tabled by Treasury Cabinet Secretary, Ukur Yatani, and were intended to finance President Uhuru Kenyatta's exit budget.
“The committee observed that the amendment will increase the price of maize flour, cassava, and wheat flour. The committee recommends the deletion of the proposal as contained in the Finance Bill 2022,” read the parliamentary committee's report in part.
The Wanga-led committee also proposed the reduction of VAT on Liquefied Petroleum Gas (LPG) from 16 per cent to 8 per cent.
In regard to the importation of motorcycles, the committee opposed proposals by the Treasury to increase the exercise duty noting that the sector was offering employment to many Kenyans.
It further noted that boosting the sector and other business ventures would help the government attain some of its tax targets.
It also threw out a proposal to have businesses and individuals with tax disputes pay half of the contested taxes before lodging an appeal in court.
"The committee observed that the requirement to deposit 50 per cent of the disputed amount before filing an appeal in the High Court will reduce working capital for businesses and also deny justice to taxpayers where they are unable to raise the amount. The committee, therefore, recommends that the clause be deleted."
Members of Parliament are expected to debate the recommendations made by the Wanga-led committee before approving the final Bill.
The move by the Finance Committee to reject the additional taxes will cushion Kenyans from the rising cost of living.
