State drops plan to tax bread and flour

The government has bowed to public pressure and instructed its MPs to move amendments to remove maize flour and bread from the list of goods to be taxed.

Jubilee MPs have resolved to amend the VAT Bill to exclude maize flour and bread even as Cord MPs vowed to soldier on with their plan to oppose the Bill.

The decision to exclude the two commodities followed consultations by the Jubilee Parliamentary Group on Tuesday over concerns touching on the Bill which seeks to raise Sh10 billion extra revenue for the government.

On Wednesday, State House sent a statement to newsrooms announcing that Jubilee MPs had resolved to have maize flour and bread remain zero-rated.

Earlier, Majority Leader Aden Duale had indicated that the government would introduce in Parliament amendments to the proposed Bill to allow the exemption of the two commodities.

The statement from the Presidential Press Service said members of the Jubilee Parliamentary Group agreed to support the amendment when debate on the proposed law comes to Parliament.

“A successful amendment will ensure these vital commodities continue to be zero-rated,” the statement said.

Cord leader Raila Odinga, however, said they would oppose the VAT Bill.

Mr Odinga, who attended a Cord MPs’ meeting at Parliament Buildings on Wednesday, said the legislators would give reasons for opposing the proposed law, noting that the coalition did not agree with some aspects of the Bill.

“The issue is the principle, what is it that we stand for?” he said. “I hope all other MPs will be pricked by their conscience and vote in a reasonable manner to support the common man on the streets,” he stated.

Mr Duale said Jubilee would introduce amendments to support the Jubilee government’s efforts to fulfil its campaign pledges to the electorate.

“We are here to represent people, no person is called Cord or Jubilee,” he stated. “It has to be the position of the people,” he stated.

Some of the amendments are expected to be proposed by the House Finance Committee, which is scrutinising the Bill.

Some MPs are also expected to propose other amendments on the floor during debate.

Mr Duale maintained Kenya needed the VAT law.

Cord MPs have expressed concern that the Bill, if passed in its current form, will see the prices of many basic commodities shoot up by 16 per cent after the withdrawal of their tax exemption status.

The lawmakers said they would not accept the Bill until basic food items, which were previously zero-rated, were accorded the same status or exempted in the proposed law.

Suba MP John Mbadi said the government could not raise money ‘through taxing poverty.’

The Bill will be debated after the committee files its report to the House within the next seven days.