This archive report was first published on 21 June 2020.
On June 11, Finance CS Ukur Yatani presented a Sh2.7 trillion budget to the National Assembly, which included proposals to raise revenue through various measures.
However, the National Assembly's Finance and National Planning Committee, chaired by Kipkelion East MP Joseph Limo, rejected a proposal by the National Treasury to remove liquefied petroleum gas (LPG) from the tax-exempt list under Value Added Tax (VAT).
The committee's decision means that the Treasury may have to look elsewhere to raise the Sh320 million needed to finance the budget.
The proposal, which was part of the 2020 Finance Bill, aimed to raise Sh8 billion by imposing a 14 percent standard rate tax on items previously exempt from VAT.
The items included in the proposal were some helicopters and aeroplanes not exceeding 2,000kg, tractors, aircraft pneumatic tyres, and goods for clean cooking stoves.
Lawmakers took into account the need to ensure that citizens are not overburdened amid the Covid-19 pandemic, which has prompted companies to cut jobs and led to reduced spending.
“Those who made presentations before us said the cost of the proposals by the National Treasury will be borne by the final consumers, who currently have limited financial resources due to the negative effects of Covid-19 disease. This proposal was adopted by the committee,” reads the committee's report.
