It is not surprising that MPs are up in arms against a move by Finance minister Njeru Githae to introduce a draft Value Added Tax ( VAT) Bill in Parliament this week.
The Bill, according to legislators who have seen it, proposes to increase what Kenyans pay as VAT.
This will no doubt eventually result in an increase in the price of essential commodities.
Zero-rated goods like maize and wheat flour, milk, bread, sanitary towels, infant formula, exercise books, and farm inputs could attract a 16 per cent VAT.
It is also likely that electricity bill could go up because levies on power, which are now at 12 per cent, would rise to 16 per cent.
Mr Githae’s plan is part of the Treasury plans to raise the Sh1.5 trillion required for the Budget this financial year. That is bad news coming at a time many Kenyans are going through hard economic terms.
Any move designed to push further the cost of living is bound to face stiff resistance and it is not surprising that the MPs have voiced their concern on its effect.
The MPs, who met in Naivasha, wondered why there is a hurry to introduce the Bill in the House yet various groups have expressed reservations.
Already, agrochemical manufacturers, importers, and distributors have rejected plans to levy VAT on agricultural inputs.
We urge Treasury to listen to the voices that oppose the move and listen more to advice from experts on how to increase revenue.
Overhauling the current tax regime may not yield the desired results and could eventually hurt the poor most.
Githae and his team at the Treasury must look for alternative measures that would not hurt low-income earners.
