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VAT Bill: A bitter pill for ‘ailing education sector’

By By PETER KAMURI | July 31st 2013


The Government’s free primary and day secondary education flagship programmes are at jeopardy if the Parliament approves proposals contained in the VAT Bill, 2013, which seeks to introduce tax for books and stationery. Currently, such learning materials are zero-rated but if the proposed law is passed, they will attract 16 per cent tax.

Among the teaching and learning materials that are going to attract VAT are exercise books, dictionaries, geographical maps, instructional charts and diagrams. Others are children’s pictures, drawing and colouring books as well as printed books and examination papers.

With the law in place, the Government will be forced to increase its funding to schools if the free education programme both at primary and secondary levels it to be sustainable.

This is mainly because the budget per learner per year for instructional materials will drastically lose value and many students may end up going to class without textbooks.

Learners’ materials

“The current Sh1,020 provided annually by the Government to each pupils to buy stationery, textbooks and readers will be eroded by 50 per cent to a mere Sh510 — hardly enough to buy two textbooks for any child let alone buy exercise books, pens, pencils, rubbers and sharpeners,” says Simon Sossion, the CEO Target Publications and vice-chairman of the Kenya Publishers Association (KPA).

As Government prepares to roll out the laptop computers programme for Standard One pupils, next year, the cost of running the initiative is set to go up as electrical energy will be taxed at the standard rate of 16 per cent up from 12 per cent. This is notwithstanding the fact that computers and computer software will be taxed.

According to KPA chairman Lawrence Njagi, the new VAT on books and stationery will dramatically increase the price of books and other learning materials by as much as 50 per cent.

“There will be a cumulative effect along the book production and distribution chain. There will be input tax related to most of the supplies like paper and electricity. In addition, printers will charge VAT to publishers at the production stage. Publishers will in turn load VAT on the book price to booksellers, who will, in turn, factor VAT in their final price to the consumer,” argues Njagi.

Donors’ fears

This ripple cost effect will see the price of a Class Six mathematics textbook, for instance, currently retailing at Sh356 shoot to Sh557. An English dictionary and a Bible, costing Sh750 and Sh550 would rise to Sh1,072 and Sh858, respectively.

This is mainly because the cost burden will be shifted to the final consumer.

According to Sossion, funding of free primary education and free secondary education by donors may also face challenges as most of them will not be willing to have their funding go to the Government VAT kitty.

Mr Njagi argues if instructional materials are removed from tax exempted items, realisation of Vision 2030 will be a mirage. “Most graduates of our institutions of learning will come out half-baked, having gone through the education system without the primary resource for learning — books!”

He adds, “It is important to note that in the Government economic blueprint as contained in the Vision 2030, Education is central to achieving the goals set out in the social pillar.”

Njagi contends that publishing industry will be in a disarray: “There will be capital flight especially from multi-national publishers as they will view book production in Kenya as unfavourable. In addition, the local publishing industry will not be able to effectively compete in the regional market as our products will be unfavourably priced in comparison to our neighbours.”

In most countries across the globe, books are excluded from taxation and this is meant to protect the delicate education sector from adverse effects of high costs.


“Most neighbouring countries import books from Kenya and since products for export are not subject to VAT, Kenyan books will be cheaper in these other countries than in Kenya!” says Njagi.

At risk will be Kenya’s realisation of achieving the Millennium Development Goals of universal primary education by 2015 as the number of learners dropping out may rise. “The education sector will shrink as a result of high costs while in the regional countries the education sectors will expand exponentially,” observes Sossion.

The VAT Bill, 2013 has so far generated a lot of heat with some civil society groups mobilising protesters to block it. The parliamentary committee on Finance and Trade has since excempted some essential commodities from attracting the tax.

Some of the items include fertilisers, certain cereals and some petroleum products among others.

— The writer is a teacher and a publishing editor — [email protected]  

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