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Finance Committee opposes Yatani’s plan to increase tax on basic commodities » Capital News

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NAIROBI, Kenya, May 24 – Legislators in the Finance Committee of the National Assembly are urging their colleagues to shoot down proposals by the National Treasury to increase taxes on basic food commodities and common household goods.

The Committee chaired by Homabay County Woman Representative Gladys Wanga pointed out that passing the proposals would effectively leave the common man to bear responsibility for the increased costs.

“The Committee observes that imposing VAT on the commodities will increase the prices and we, therefore, reject the proposal and delete the amendment,” read the Committee report.

A vote against the Finance Bill will force National Treasury Ukur Yatani and his mandarins to go back to the drawing board to find other ways of raising revenue to meet the additional Sh51.6 billion to support the Budget.

Yatani had sought to increase the cost of maize, cassava flour, and cooking gas among other basic products.

Other items which will not be affected include soda, motorcycles for boda bodas and gaming.

The Committee has recommended that VAT on LPG should be charged at 8 percent, not 16 percent as Yatani had proposed.

Wanga and her team have also rejected a proposal to charge excise duty on motorcycles, which would have seen their tax go up.

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The Committee has given users of beer something to smile home about after the recommended the Excise Rate be retained at Sh121.85 per litre.

“Rate of beer was increased in the Finance Act 2021 and therefore needs to give manufacturers time before another increase.”

“Increasing the price of beer will encourage the consumption of illicit brews and also reduce tax collection by the Government,” the committee observed.

The MPs also felt that there was similarly no reason to increase the Excise Tax on wines and spirits was increased in the Finance Act last year and therefore there is a need to give manufacturers time to adjust.

On the Capital Gains Tax (CGT), the Committee recommended that the rate be revised to 10 percent, not 15 percent that the Yatani wanted.

Bottled water will see a marginal rise in duty charged after the committee concurred with the Treasury to impose a tax rate of Sh6.60 per litre, up from Sh6.03.

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