National Assembly invites public views on the Finance Bill that seeks to remove maize flour from the list of tax-exempt goods

The National Assembly has invited the public and stakeholders to express their views on the Public Finance Bill 2022 that seeks to remove maize flour, cassava flour, wheat flour and meslin flour from the list of tax-exempt goods.

This would see these goods subjected to Value Added Tax (VAT) at 16 percent, subsequently increasing food prices which will in turn lead to higher cost of living with maize flour being a staple meal.

In a notice, clerk Michael Sialai said the memoranda should be submitted to the Clerk of the National Assembly, delivered physically at the Parliament buildings or  be emailed to [email protected] before May 4 at 5:00 p.m.

“The memoranda may be addressed to the Clerk of the National Assembly, P.O. Box 41842-00100, Nairobi;hand-delivered to the Office of the Clerk, Main Parliament Buildings, Nairobi; or emailed to [email protected];to be received on or before Wednesday, 4th May 2022 at 5.00 p.m,” a part of the notice read.

The Bill was published on April 8, read a First Time on April 12 and thereafter submitted to the Departmental Committee on Finance and National Planning for consideration.

The finance bill also seeks to increase excise duty on goods such as bottled water and non-alcoholic beverages by 9.5 per cent to Sh6.6 per litre (from Sh6).

Excise duty on fruit and vegetable juices will increase by 9.3 per cent to Sh13.3 per litre (from Sh12.2).

The bill further proposes to increase excise duty on items like cosmetic and beauty products, powdered beer and spirits.

If passed, the contribution of excise duty tax to total tax revenue would increase from 13.8 per cent.

The Bill also proposes to increase Digital Service Tax (DST) from 1.5-3 per cent of consideration received in respect of the service provided in the case of a digital service provider or the commission or fee paid for the use of a platform in the case of a digital marketplace provider, excluding value added tax

It further seeks to exempt non-resident entities with a permanent establishment in Kenya from Digital Service Tax.

These combative revenue collection measures are aimed at reducing the fiscal deficit from 11.4 per cent of GDP to 6.2 per cent for Financial Year 2022/2023.

However, some of the proposals will hurt Kenyans more, given the current economic conditions.

If Parliament approves the bill, it will be forwarded to President Uhuru Kenyatta for assent, after which the proposals will come into effect.