Homa Bay Woman Rep Gladys Wanga, who chairs the National Assembly Finance Committee has rejected the proposals to increase taxes contained in the Finance Bill, 2022.
National Treasury Cabinet Secretary Ukur Yatani is proposing tax hikes on basic commodities as a measure to help the government raise revenue.
A number of items that are being targeted are flour, motorcycles, alcoholic and non-alcoholic beverages, and petroleum products among others.
The Galdys-led Committee also noted that if the current excise tax on alcohol would have increased, Kenya would witness a rise in consumption of illicit brews.
“The proposal to increase excise duty on alcohol may encourage uptake of illicit alcohol. The government may not, therefore, achieve the intended purpose of the tax, which is to discourage drinking, and will therefore not realise the expected revenue,” read part of the report.
Treasury intends to generate an additional Ksh.51.6 billion from the Finance Bill’s new tax increments.
Wanga instead, recommended lowering of Value Added Tax (VAT) on Liquified Petroleum Gas (LPG) to 8 percent from 16%.
Proposals to increase excise duty on motorcycles were also shot down, with the MPs arguing that the Boda Boda industry had created employment for millions of Kenyans.
The report is set to be tabled in the National Assembly on Wednesday as the Finance Bill, 2022 enters the second reading.
