Henry Rotich scraps VAT on maize and wheat flour

Cabinet Secretary Henry and his team leave the National Treasury for Parliament to unveil the Budget on March 30, 2017. PHOTO | SALATON NJAU | NATION MEDIA GROUP.

The government has moved to address the increasing cost of maize flour in the proposals read by Treasury Cabinet Secretary Henry Rotich.

Tax interventions meant to reduce the cost of maize flour, including duty-free importation of maize in the next four months and the removal of Value Added Tax on both bread and maize flour, have been unveiled in a move meant to lower the costs of the basic food for Kenyans.

BETTING PAIN

Mr Rotich said the two commodities were expected to be cheaper after the exemptions and warned millers and bread manufacturers of a reversal should they fail to pass the benefits to the consumers.

“In order to make these commodities affordable for the common mwananchi, I propose to zero-rate bread and maize flour to remove VAT altogether,” he said in his Budget Statement to Parliament on Thursday.

“Manufacturers, wholesalers, and retailers who sell such goods will be expected to reduce the prices of these basic commodities, failure to which, I will reverse the policy.”

The government has also proposed to raid betting, lottery, gaming and competition firms with a heavy 50 per cent tax for all categories.

The proceeds, according to the budget plan, will be put in the newly created National Sports, Culture and Arts Fund to support development of sports, culture and arts in Kenya.

SH13,486

The Jubilee administration also outlined key achievements in the past four years as it presented its final spending plan before the August elections.

Mr Rotich, who was holding the budget briefcase for the fourth time, took time to demonstrate how the government has made progress in improving security, infrastructure, education, health care and access to electricity.

The budget is also full of incentives to attract foreign investments and protect locally manufactured goods.

Income tax bands have also been expanded by further raising the lowest taxable income to Sh13,486 from the current Sh11,135 in what will be an extended relief to low-income earners.