Home Commodities Parliamentary committee proposes tax reduction in basic commodities

Parliamentary committee proposes tax reduction in basic commodities

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Maize flour, milk and bread might be exempted from tax increases as proposed by Treasury in the Finance Bill if parliament adopts the National Assembly Finance Committee report. 

The committee says the three are basic commodities and any tax increment will cause inflation and reduce citizen’s purchasing power. 

This is among a raft of tax reduction measures that the parliamentary committee is seeking to scrap in the tax bill amendments.

In his budget speech this year, Treasury Cabinet Secretary Ukur Yatani proposed a raft of tax measures that he said would assist the government to raise over 2.1 trillion shillings to fund the budget. 

The National Assembly now says some of the tax increases as proposed by treasury might be counterproductive. 

The National Assembly Finance Committee recommended that treasury exempts maize and cassava flour, bread, and milk from a 16 percent VAT increase. 

Parliament has also opposed the increase of excise duty on processed juices and proposed the exercise rate be reduced to 13 shillings. 

Bottle water has also been spared from the tax increases with parliament advising the rates remain unchanged from the last financial year. 

The finance committee is also proposing the scrapping of the requirement for one to deposit 50 percent of the disputed tax amount prior to appealing a tax appeal tribunal decision. 

The committee says the requirement is unlawful and might deny justice to aggrieved entities if the disputed amount is not raised in addition to the loss of working capital.

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