Fury over food prices despite State assurance

By Macharia Kamau

Nairobi, Kenya: Kenyans are still jittery about the possibility of basic food items being subjected to a 16 per cent Value Added Tax despite the Treasury last week saying that it had removed essential household items from the proposed VAT Bill set to be tabled before Parliament in coming weeks.

Civil society organisations have this week planned a three-day protest, which started Tuesday, that will see them hold rallies and demonstrations in different parts of Nairobi, including a protest walk on Harambee Avenue.

Unpopular item

A survey done by research firm Ipsos Synovate last week showed that the proposal to re-introduce the VAT Bill was the most unpopular item in the Budget statement delivered in Parliament on June 13, with 86 per cent of Kenyans against the move.

National Treasury Cabinet Secretary Henry Rotich had said if the VAT law is passed, it would help increase revenue collections by Sh10 billion.

However, the Government last week yielded to pressure from the public and said it would not subject food items and medicines to VAT.

“Essential commodities such as food and medicines will be VAT-exempt to address the plight of people who cannot afford them. But there are other items that are really for the rich,” said Treasury Economic Secretary Geoffrey Mwau in an interview last week.

Among the essential items currently not subject to VAT are bread, milk, maize flour, livestock feed, pesticides, sanitary towels, books, newspapers and computers.

Mwau added the Bill was aimed at modernising and simplifying VAT law and would only subject to tax luxury items that are currently VAT-exempt.

The contentious VAT Bill was shelved last year over its implications on the cost of living in the country.