A parliamentary committee has rejected proposals to increase taxes on basic goods, dismissing claims that international financial institutions pressured its decisions on the 2022/23 Finance Bill.
The Finance and National Planning Committee, chaired by Homa Bay Woman Rep Gladys Wanga, rejected most National Treasury recommendations to raise Sh51.6 billion through higher levies on items like motorcycles, cosmetics, and alcoholic beverages. The committee argued that passing the bill in its original form would burden Kenyans with unaffordable commodity prices.
The proposed tax changes included a Sh13,403.64 excise duty on motorcycles, 10% beer tax, 20% spirits duty, and 15% levies on cosmetics and beauty products. The committee opposed raising VAT on maize and wheat flour, warning it would increase bread prices by over 10%.
While supporting higher duties on jewellery and anti-counterfeit measures for beauty products, MPs rejected increases on beer and wine, citing risks of illicit production. They also advocated for lower excise rates on fruit juices and reduced advertising taxes for media outlets.
The committee’s decisions force the National Treasury to seek alternative funding sources, potentially through borrowing or budget cuts. The Finance Act 2021’s recent alcohol duty revisions were cited as reasons to delay further tax adjustments.
