The government of Kenya has defied the call of Kenyan Catholic Bishops, which urged them not to tax basic goods. Starting 2nd September 2013, basic consumer goods such as milk and electricity among other things which were previously zero-rated will now attract 16% Value Added Tax (VAT).
This came in the wake of the Kenyan president Uhuru Kenyatta signing into law the bill, which imposes VAT on basic commodities such as milk, fertilizer, cooking gas, text books and cost of electricity among other retail products.The Bill was signed into law by the president mid-August and on 2nd September; the Kenya Revenue Authority published a notice declaring its intent to fully implement the law.
The Catholic Church through the Chairman of Kenya Catholic Bishops Conference His Eminence John Cardinal Njue on 28th June, 2013, during a press conference expressed that it was against the idea of imposing taxes on basic commodities as doing so would burden Kenyans further.
In a statement red to the press, the Cardinal said that "We are deeply concerned by the government’s attempts to increase the taxes and therefore the prices of basic commodities and services. We remind the government that despite the increase in Kenya’s budget and government income, majority of Kenyans are poor, jobless and lack a stable source of income.”
The Catholic Church was reacting to the VAT bill 2013, which the government had prepared as it planned to impose value added tax on goods previously zero-rated. They include bread, milk, maize flour, sanitary pads and newspapers.Previously electricity was subject to a 12 per cent VAT while households that consumed less than 200 units per month were VAT exempt. Under the new law, all consumers will pay 16 per cent regardless of the number of units.
Initially Treasury had hoped to raise Sh10 billion through the revision of the VAT Act. Though the initial list of goods that would be subject to VAT included maize and wheat flour, sanitary pads and processed rice, some of these items were deemed too essential and struck off the list.
Source: AMECEA Social Communications