The Parliamentary Budget Office, an advisory team of economists and fiscal analysts, has done its part and has given the National Assembly the tools it needs to amend the controversial Value Added Tax (VAT) Act, 2013 whose implementation led to a sharp rise in the price of many goods and services consumed by the more vulnerable members of the Kenyan society.
The advisory team argues that although the amendment would result in a Sh4.2 billion shortfall in expected taxes, Kenyans would benefit from a drop in the cost of living and an increase in their disposable incomes. It is incontestable that individuals spend their incomes better than the government does as the increasing number of scandals in the use of public funds readily testifies.
Levying of VAT on books, newspapers, periodicals and journals, for example, has meant parents with school-going children have seen the amount of money going into education climb at the expense of the domestic budget.
The result, in many a poor household in the urban and peri-urban areas is a sharp reduction in the money spent to buy such key food items as milk, eggs and green vegetables. Needless to say, this adversely affects the family diets.
What is even more unconscionable, the affected families are usually left in no position to afford to pay for quality medical services required when their poor diets throw the door open to opportunistic diseases.
The Bill also seeks to have fishing nets, mosquito nets, ambulances, hearses, sanitary and pest control services, animal feeds, insecticides, fungicides and herbicides and the supply of water drilling services, all exempted from the 16 per cent tax.
The proposed law also seeks to have all households who use electricity of up to 200 kilowatt hours exempted from paying tax on electricity. The law also proposes that supplies to the Rural Electrification project should be exempted.
The fact that Parliament has still to find a way of ensuring that public finances are spent for the intended purpose should persuade all MPs to support the amendment Bill sponsored by John Mbadi (Suba) irrespective of their political leanings. Better still, the government could take over the Bill and ensure it is enacted into law expeditiously.
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