Govt targets higher taxes on common commodities to finance Ksh.3.3 trillion budget

Govt targets higher taxes on common commodity to finance Ksh.3.3 trillion budget

The financing of President Uhuru Kenyatta’s final budget will attract higher taxes on common household commodities as he vacates office in August this year.

As shown Finance Bill for 2022, Flour, alcohol, chocolates, and beauty products are among the items to receive higher taxes.

Wheat, maize, and cassava flour will attract a 16 percent Value-Added Tax (VAT), or the consumption tax under the bill tabled by Gladys Wanga, the chairperson of the Finance and Planning Committee.

In the proposed changes, the Government also seeks to increase a 10 percent levy on bottled water, soda, beer, and spirits effective Jan 1, 2023, to raise an additional Ksh.50.4 billion for the year starting July to finance the Ksh.3.3 trillion budget.

The Government also intends to gain more from betting, gaming, and lottery whose excise duty will triple from 7.5 percent to 20 percent.

This will be the second time the state will be pushing for a 20 percent excise duty on proceeds from betting after it was shot down by Members of Parliament last year.

The 20 percent tax was introduced in 2019, but betting firms successfully lobbied legislators to remove it a year later through changes to the Finance Act 2020.

The excise duty on alcohol, cigarettes, fruit juices, soft drinks, ice cream, cosmetics, and beauty products was also increased by 10 percent.

In the proposed changes, a unit of the imported motorcycle will be slapped with an excise duty of Ksh.13,403.64 compared to the current rate of Ksh.12,186. A double blow for boda-boda operators, who have also been included under compulsory third cover insurance.

Under the proposals, a liter of bottled water with an excise duty of Ksh.6.60 will go up from the current rate of Ksh.6.03.

“Mr. Speaker, in the Bill, I have also proposed to increase the specific rates of excise duty for a number of products by 10 percent to generate additional revenue for the Government,” said Treasury Cabinet Secretary Ukur Yatani.

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