Shame on Treasury CS bid to tax milk and bread to impress IMF

The governemt is considering imposing VAT on bread. [Olivia Murithi, Standard]

The government is considering whether to impose VAT (Value Added Tax) on milk and bread, according to The East African, March 16, 2024.

This was presented by our National Treasury CS at the Africa Fiscal Monitor Forum organised by our great navigator and guide, the IMF.

The CS justified it by stating he had through computer simulation, found that the absence of tax on milk was not helping the poor but only benefiting the middle-class who bought milk and bread in supermarkets.

So, he wants to tax not only the middle-class but all the poor also? This is not logic. He was silent about the rich. He knows the rich acquire their milk and bread as entitlement and manna from heaven, and pay neither price nor tax.

Is our economics team serious and so without embarrassment in talking like this without compassion and concern for the country? Or are they only showing the IMF and the diplomatic community (and themselves), how clever they are with exotic solutions which no one else has thought up. Supermarkets? Have these so-called pundits heard of kiosks, where millions of Kenyans buy their milk and bread in all 47 counties?

Computer simulation can also show us that we can also increase resources by bringing corruption down by 90 per cent, by daily rounding up a random 100 Kenyans in each county and then without trial or hearing, executing them in public by firing squad. We could say trials are not benefiting the innocent poor, but only the guilty middle class who can afford clever lawyers from legal supermarkets. Again, we would not mention the rich, who neither get tried nor found guilty. I could help the IMF organise such an Africa Rule of Law Monitor Forum. Gratis.

If a Milk and Bread VAT tax is even thought up for consideration by our economics team, which includes Rhodes scholars in economics and our ex-World Bank wizards, both categories supposedly holding expertise of the highest order, it brings shame on our nation. It is the greatest danger to our children, particularly of poor parents, a precursor of malnutrition in generations of our infants, a decimation of our primary school system and debilitation of a healthy work force.

Treasury should take a careful look at the actual poverty and the absence of enough milk and bread in our children nation-wide, rural and urban, and then look in the mirror. You are leaders to find solutions consistent with the protection of your people, not to crush them because your supposed outstanding intellectual past but present non-performance cannot rise enough to find sane alternative resources. 

Already, “Two-thirds of Kenyans even on permanent jobs [like teachers and civil servants] are taking up side hustles to cope with the tough economic times.” (Tala credit survey, Business Daily, 21 March 2024). One major medical crisis in the family makes the economic situation a danger. And the CS wants to tax them on key necessities like milk and bread?

All the above shows this regime does not have any long-term planning for development. Or a tax policy within such a plan. This impacts directly on our methods of raising revenue, and the limits of taxation. It explains our ad hoc and distracted search for anything to tax. The regime does not know why it is in power, save to enrich individuals. Its promise to a large number of voters including boda bodas, has failed.

This government’s own report (Kenya National Bureau of Statistics, 2024) states, “The number of new motorcycle purchases has slumped to the lowest level since 2008 as high taxes and sky-rocketing fuel prices”, the imposition of VAT on fuel, and the risen cost of credit have all cut motorcycle purchases to less than half of those in 2022.”

This evidence shows the business no longer benefits riders as it used to, despite campaign promises, and 50 per cent fewer riders are entering the business. Riders and their families do not buy milk in supermarkets. And the CS wants to tax them on milk and bread? 

Marie Antoinette the Queen of France just before the French Revolution (1789) was told of the demand by the poor of France for bread. Her famous reply was, “Let them eat cakes.”

The poor of France did not follow her advice, they did not eat cakes. They looked for another solution.

-The writer is senior counsel