New tax move to drive illegal trade, lobbies warn Treasury

Kenya Association of Manufacturers Chairman Mucai Kunyiha. [File, Standard]

Private sector players have warned that proposals by the National Treasury to increase taxes on some commodities could have a far-reaching impact on the economy.

In their submissions to Parliament, different industry players noted yesterday that Treasury’s proposals contained in the Finance Bill, 2022 across different products, including flour, alcoholic beverages and cosmetics could be counterproductive. They said some of the tax measures might not necessarily lead to increased tax revenues over the next financial year, with consumers likely to cut back on consumption, in turn, leading to the growth of the black market.