Molo Member of Parliament and National Assembly Finance Committee Chairperson Kuria Kimani has clarified on the proposal to introduce a 16% Value Added Tax (VAT) on bread.
Speaking on Citizen TV on Thursday night, May 16, 2024, the lawmaker detailed that a conversation with the National Treasury brought up concerns about the rise in diabetes cases among bread consumers in the country.
“We had a very long conversation with the Treasury about this VAT. The initial thinking was that there is a concern about diabetes,” Kimani divulged.
The MP reiterated that the contents of Finance Bill 2024 are just proposals as of now, inviting members of the public to submit written opinions on the same.
“The argument we are receiving from Kenyans is that bread is not a luxury good. People have it every morning for breakfast,” said Kimani.
“We have received this proposal and are asking Kenyans what their views about it are. As a committee, we will weigh the Treasury’s sentiments against what Kenyans are saying before making an informed decision on the proposal and its impacts.”
Kimani revealed that a section of Kenyans had raised unfair competition and health concerns in the sale of bread shout the VAT be introduced. Taxing widely distributed bread would push consumers to informal bakeries that sell the commodity locally, further raising health concerns.
Pending submissions by the public and parliamentarians, Kimani noted that VAT on bread could be introduced at 16%, zero-rated, or the commodity could be exempted from tax.
“Bread has been zero-rated so the three options are it continues to attract 16 percent of VAT as proposed in the bill, the other option is to make bread tax exempt or take it back to zero-rated,” he said.
“We will take everything into consideration when doing our report before taking it to Parliament.”
The proposal to introduce VAT on bread has angered a majority of Kenyans who are struggling to bear the brute of the economy as it is. The opposition has called on the government to refrain from imposing taxes that could strain businesses and other operations in the country.
