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Let Them Eat Cake – GOK to Wanjiku on Proposed Bread Tax

Bread Tax

The proposed Finance Bill 2024 has been received with a lot of sentiment among Kenyans who are already weighed down by a heavy tax regime. After a bout with the Finance Bill 2023, Wanjiku has no reprieve as the National treasury proposes a 16% Value Added Tax (VAT) on bread.

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A move that was informed by concerns about diabetes among other things, National Assembly Finance Committee Chairman and Molo MP, Kuria Kimani, speaking on Citizen TV’s ‘Tonight’ show on Thursday night, revealed that they’ve had long conversations with the Treasury on the proposed VAT and sentiments of Kenyans will be taken into account, to make an informed decision.

Bread Tax
A supermarket attendant arranging loaves of bread on a shelf at Naivas Food Market Waterfront Mall in Nairobi in this picture taken on October 12, 2020. Photo: Evans Habil

“We have received this proposal and are asking Kenyans what their views about it are. As a committee, we will weigh the Treasury’s sentiments against what Kenyans are saying before making an informed decision on the proposal and its impacts,” said Kimani. He further pointed out that the arguments they were receiving were that bread is not a luxury good and people have it every morning for breakfast.

“Some of the arguments raised is that in addition to bread sold in the supermarket, there’s also bread baked in informal shops and if you tax the bread in the market, people will move from that formal bread to bread baked on the roadside and by these small bakeries which could raise more health concerns,” he said.

“I want to reiterate this, these are proposals and the Committee of Finance and National Planning is asking Kenyans to give their views.”

Kimani detailed three potential actions concerning the bread tax proposal: applying the proposed 16% VAT on bread, making bread tax-exempt, or restoring its previous zero-rated status.

“The options are to maintain the 16% VAT on bread as proposed, to make bread tax-exempt, or to revert it to a zero-rated status,” he explained, emphasizing that the committee will consider everything when making the report before taking it to Parliament. The opposition principal, Kalanzo Musyoka, has urged Azimio legislatures to reject the bill.

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