Relief for Kenyans as MPs Reject New Taxes on Maize and Wheat Flour, Boda Bodas

The National Assembly Finance and National Planning Committee has rejected the Treasury’s bid to introduce taxes on essential commodities such as maize flour.

Through the Finance Bill 2022, the National Treasury was seeking to remove maize, cassava, and wheat flour from the tax-exempt list, a move that would have seen the goods subjected to Value Added Tax (VAT) at a 16 percent rate.

“The committee observed that the amendment will increase the price of maize flour, cassava, and wheat flour,” the committee noted.

The Gladys Wanga-led committee also endorsed the reduction of the rate of VAT on LPG from the current 16 percent to eight percent and rejected the proposed increase of excise duty for imported motorcycles, arguing that such a move would lead to an increase in the price of boda bodas, which are a major source of employment for many youths in the country.

The committee further recommended the retention of the rate of excise duty on beers, wines, and spirits at Sh121.85, Sh208.20, and Sh278.70 per liter respectively.

Gamblers also won big after the committee backed the hold of the rate of excise duty on staked amounts at 7.5 percent from the proposed 20 percent and rejected the introduction of duty at the rate of 15 percent for advertisements on betting and gaming competitions.

Locally manufactured ice cream and chocolate have also been exempted from excise duty. Further, the rate of digital services tax (DST) has been retained at 1.5 percent from the proposed three percent.

The committee also shot down the proposal requiring taxpayers to deposit 50 percent of disputed tax revenues while appealing decisions by the Tax Tribunal, saying that this would harm the working capital of businesses.