New tax law set to lower drug prices
Members of the National Assembly at a past session. Ten national secondary school principals will soon face a parliamentary committee for questioning over fishy expenditures. FILE PHOTO | NATION MEDIA GROUP
What you need to know:
- The House also left an amendment adding ambulances and hearses among tax exempt items even after the Finance, Planning and Trade committee opposed the same proposing its deletion
- The Bill which went through the Third Reading on Wednesday seeks to broaden the list of goods and services exempted from taxation
The cost of medicine is expected to go down after Parliament passed a Bill that exempts manufacturers from paying tax on raw materials.
The House also left an amendment adding ambulances and hearses among tax exempt items even after the Finance, Planning and Trade committee opposed the same proposing its deletion.
The amendments were contained in the VAT (Amendment) Bill that was moved by Suba MP John Mbadi with enrichment from the Finance, Planning and Trade committee.
Members added a new item to allow exemption of tax to inputs and raw materials either produced locally, imported or supplied to manufacturers licensed by the Pharmacy and Poisons Board.
AMENDMENTS REJECTED
This is after consultations with Cabinet Secretaries for National Treasury and Health. This was proposed by the House committee on Finance, Planning and Trade.
Amendments by Mr Mbadi seeking to exempt tax from Credit Reference Bureau and postal services were, however, thrown out by the House during the committee stage of the House.
Members also rejected attempts to exempt water drilling services from taxation as the Rural Electrification Authority for the supply of electricity to households-restricted to 200 kilowatt hours.
The latter was rejected following arguments that it would only benefit the middle income citizens. A part from the pharmaceuticals, the House also allowed exemption of tax to specialised solar equipment and accessories including solar water heaters and deep cycle-sealed batteries which exclusively use or store solar power.
The amendment was moved by the chairman of the committee on Finance Benjamin Langat.
The House agreed to the committee’s proposal to delete the amendment that had been suggested to include disinfectants, insecticides, rodenticides, fungicides, herbicides, anti-sprouting products and plant growth regulators among tax exempt products.
The Bill which went through the Third Reading on Wednesday seeks to broaden the list of goods and services exempted from taxation. This will lead to a reduction in prices of those goods and services.
Air ticketing services supplied by travel agents, unprocessed green tea and the sugar industry were some of the sectors that benefited from the Bill.
Reports by Carol Wafula, Dennis Odunga and Jeremiah Kiplangat
