Parliament has invited Kenyans to give views on the Finance Bill 2024 that seeks to introduce Value Added Tax – VAT on bread and increase levies on mobile money transfer services like M-PESA.
The invitation to submit a memorandum is pursuant to article 118(1) (b) of the constitution that requires Parliament to facilitate public participation and involvement in the legislative and other business of Parliament and its committees.
The Finance Bill 2024 sponsored by Molo lawmaker Kimani Kuria which contains proposals relating to revenue-raising measures was read first on May 13, 2024.
The Bill seeks to amend the Value Added Tax Act (Cap.476) to change the supply of importation of various goods, including gluten bread, and unleavened bread, from exempt supplies to standard Rate VAT.
It also seeks to remove various items listed zero-rated supplies, including the supply of an ordinary bread.
Bread Prices and M-Pesa Charges to Increase in the Finance Bill
The Bill proposes a 16 percent VAT on bread, which will see the price of the commodity skyrocket.
According to the new proposal by the National Treasury under the Finance Bill 2024, the price of a common 400 grams loaf is set to rise by at least Ksh10.
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Currently bread is VAT-zero-rated to make it affordable to most Kenyans. The introduction of the 16 percent VAT would see the price shoot from Ksh60 to Ksh70.
The National Treasury had exempted bread from the list of VAT products back in the 2021/2022 Budget during the tenure of former Cabinet Secretary Ukur Yattani.
The new proposals have also suggested the rise of excise duty on fees for mobile money transfer services such as M-Pesa and money transfer charges in banks and Saccos.
If passed, Kenyans will have to dig dipper into their pockets as the proposals seek to impose an additional five percent excise duty on the money transfer services from the current 15 per cent to 20 per cent.
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The change is made by deleting a clause in the current Finance Act indicating that “Excise duty in fees charged for money transfer services by banks, money transfer agencies and other financial service providers shall be fifteen percent of their excisable value.”
And replacing the clause with “by deleting the words “fifteen percent” and substituting therefor the words “twenty percent”; (ii) in paragraph 2, by deleting the words “fifteen percent” and substituting therefor the words “twenty percent”.”
How to Share Comments Concerning the Proposals
Any written memoranda on the Bill should indicate the name of the person or organization submitting it and their contact details.
Kenyans can submit their comments physically by delivering to the Office of the Clerk of the National Assembly at first Floor, Main Parliament Buildings, Nairobi.
They can also email to [email protected] to be received on or before Tuesday May 28, 2024, at5:00pm.
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