This archive report was first published on 23 June 2021.
On June 23, 2021, the Finance Committee (National Assembly Finance and National Planning Committee) rejected tax proposals on bread, citing tough economic times.
The Committee argued that an increase in bread prices would go against the government's Big Four agenda pillar on food security.
The National Treasury had proposed to impose higher taxes on bread, motorcycles, betting, imported jewelry, and nicotine pouches to fund President Uhuru Kenyatta's KSh3 trillion budget.
However, the Committee rejected the proposal to move VAT on the supply of ordinary bread from zero to exempt, citing concerns that it would raise the cost of living for Kenyans.
Instead, the Committee proposed that maize flour, cassava flour, wheat, and maize flour containing cassava flour be zero-rated for tax purposes.
The Committee also rejected the variation of excise duty for motorbike/bodaboda imports from a flat rate of KSh11,608.23 to a varied rate of 15%.
Furthermore, the Committee proposed that locally manufactured confectionery remain exempt from excise duty while increasing the effective rate of excise duty on imports from KSh20 per kilo to KSh35.
Additionally, the Committee proposed that transportation of sugar cane to milling factories be zero-rated and that the importation of glass bottles from East African community countries be exempt from excise duty.
The Committee also recommended reducing the proposed rate of excise on products containing nicotine from KSh5,000 per kg to KSh1,200 per kg.
However, the Committee proposed increasing the rate of excise duty from 15% to 20% on telephone and internet data services, as well as hiking excise duty on waged amounts from 20% to 30%.
