MPs adopt amended VAT Bill, go on recess

The National Assembly has paved the way for exemption of basic foodstuffs from taxation after passing several amendments to the proposed Value Added Tax Bill.

MPs adopted the amended Bill on Tuesday night, before taking their recess, giving the President the green light to assent to the contentious proposed law that had initially attracted opposition from some quarters.

However, the amendments covered some of the concerns raised. The legislators said they had heard the pleas of Kenyans in adopting the changes.

The Leader of Majority Adan Duale said the changes were informed by the several concerns of various civil society groups and other stakeholders who urged the government to abandon the proposed taxes on essential foods like maize flour and bread.

“We will be the first country in the region to enact the first VAT law and at the same time cushion our people from higher costs of basic food items,” said Mr Duale.

Consult widely

Most of the amendments were factored in by the Committee on Finance, Planning and Trade chaired by Ainamoi MP Benjamin Langat who said they consulted widely before introducing them in the Bill.

The proposed VAT law had been fought by the civil society after it emerged that it targeted some essential consumer items like flour and bread.

However, on Tuesday, the lawmakers exempted maize flour, maize (corn) seed, rice, wheat flour, ordinary bread, gluten bread and unleavened bread, infant milk and food preparations for infants, milk, sanitary towels, tampons, mosquito nets, newspapers, journals and periodicals.

Also spared the new 16 per cent tax are syringes, needles and other surgical equipment. Agricultural pest control products, equipment required by the disabled including the blind people were also zero-rated.

The House rejected an amendment that sought to include chalk and text books as proposed by Buuri MP Kinoti Gatobu (Independent) despite spirited attempts by the lawmaker to get them in the zero-rated bracket.

“In the spirit of the free primary education these books should also be exempted to enable parents afford them,” said Mr Gatobu when he moved the amendment.

However, the House rejected his pleas saying the move would benefit publishers than the children.

Women MPs lauded the zero-rating of sanitary pads saying young girls would be protected from expected higher cost of the “important item of their lives.”

“These pads are part and parcel of our lives. Some women consider them more important than food,” said Meru County women representative Florence Kajuju (TNA).

President's assent

The Bill now awaits President Kenyatta’s assent. The National Treasury hopes to collect over Sh10 billion from the new taxes expected to be in place a month after they are gazetted.

Meanwhile, the MPs took a one-and-half month break on Tuesday night after passing the Bill.

The House will resume on September 17 after Chief Whip Katoo Metito proposed an amendment to extend the recess for another two weeks from September 3. The lawmakers agreed and unanimously adopted the extension.

The House also adopted the County Allocation of Revenue Bill, originating from the Senate, which gives way for the release of Sh210 billion allocated to the 47 counties. The House extended the day’s sitting to allow conclusion of business on the order paper before taking the break around 10pm.

The Bill from the Senate was adopted by the National Assembly without any amendments as the Leader of Majority requested members not to propose any changes to ease passage.

“We can afford to rubberstamp this bill from Senate for once,” said Mr Duale.

The lawmakers also passed the Constituencies Development Fund (Amendment) Bill.