I wrote about the VAT bill a few weeks ago and highlighted a petition to stop it from adding a 16p.c tax on basic commodities. Well, succumbing to the pressure the National Treasury recently announced that it has removed the controversial 16 per cent Value Added Tax on basic commodities from the VAT bill.
Economic Secretary Geoffrey Mwau said they are reviewing options that would aid in protecting the poor, including scraping the proposed taxes on basic items such as food, medicines, fertilizer and agricultural inputs.
In an email announcing the news to those who supported the petition, Patrick Kamotho, an organiser with Bunge la Mwananchi, part of the Kenyans for Tax Justice campaign, said “I joined this campaign for tax justice because the Unga tax bill was another way the poor were going to be forced to carry the country on their backs. Already so many households in places like Muthurwa can’t put food on the table. Thousands said no to Unga tax and showed the power of the people!â€
However, luxury food items such as swordfish and caviar, which are classified as inputs to the tourism sector, would not be spared from taxation.
I see this as a major breakthrough as a 16 per cent increment on the cost of these basic commodities would mean the cost of living would go up by a similar or even higher margin. The cost of these items already seems to be too expensive for majority of the people thus an increase would only do greater harm.