MPs shoot down tax proposals on basic commodities

Parliament sitting-UPESINEWS

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BY NAMULONGO PETER,NAIROBI,24TH JUNE,2020-Kenyans can now breathe easy  after MPs on Tuesday voted to shoot down taxes proposed by Treasury on basic commodities.

The lawmakers while passing the Finance Bill 2020 removed any taxation on LPG gas, Unga and pension that Treasury CS Ukur Yatani had earmarked as some of the avenues to raise money to finance the Sh 2.7 trillion budget.

In his budget proposal, Yatani had moved to taxable category the monthly or lumpsum pension granted to a person who is 65 years of age or more; and bonuses, overtime and retirement benefits paid to low-income employees.

“We have had a lot of cries from the elderly over the proposal to tax them. What we are doing here is to save the pensioners,” Finance and National Planning Chairman Joseph Limo said.

The Bill will now go to President Uhuru Kenyatta who will now either approve it or return it to the House with amendments.

The lawmakers also zero rated maize-flour, cassava and wheat supply in a move that is meant to cushion ‘wanjiku’ from the adverse effects of the coronavirus pandemic.

The zero rating will be for a six-month period.

Brewers will however be forced to increase prices to absorb the impact of the government’s proposal to adjust relief on excise duty by 20 per cent.

National Treasury CS has proposed that the relief be reduced from 80 to per cent to 60 per cent.

On Tuesday, MPs voted to lower the coverage of excise duty on alcoholic products with more than six per cent by volume.

The Bill – first read on May 6, was before the National Assembly Finance committee chaired by Kipkelion East MP Joseph Limo.

The Parliamentary Budget Office, in its analysis of the Finance Bill, 2020, says it would be prudent to have tax measures operate for three financial years.

It says that while this will ensure certainty, hence allow businesses to plan their investments and also for concerned agencies to assess impact.

“This will guard against constant policy reversals that have become common in recent times, thus, occasioning unpredictability in the taxation system,” the PBO said.

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