This archive report was first published on 17 May 2020.
On May 17, 2020, President Uhuru Kenyatta directed a reduction in Value Added Tax (VAT) from 16 to 14 per cent to make basic commodities more affordable to consumers during the economic crisis caused by the Covid-19 pandemic.
However, despite the reduction, the prices of many commodities on supermarket shelves and other retail outlets have remained the same, leaving consumers and sellers feeling short-changed.
Essential commodities such as maize and wheat flour, soap, tea leaves, milk, rice, and cooking oil have seen little to no change in prices.
For instance, a two-kilogramme packet of Ndovu maize flour, which retailed at Sh116 in January, is still selling at the same price in supermarkets, and at about Sh120 in local shops.
Miss Jane Wangui, a baby-products vendor on Ngong Road, says that the unchanged prices have affected her line of work, acting as a barrier between her and the customer.
“I would be lying if I said that I have seen the 2 per cent reduction in VAT reflect in the prices at which I am getting my products, but at least we appreciate that the prices of the commodities haven’t gone up,” she said.
Simon Mwangi, a supplier of house fittings, claims that a reduction of two per cent on VAT is too low, especially during a time when the construction industry is experiencing low sales.
Mr Brian Rotich, an economist, appreciates the initiative but suggests that more should be done to improve liquidity, such as printing money and giving it to business owners to cater for expenses.
