By Bread Prices Still Expected To Hike
The government is expected to raise at least half of the Ksh.3.6 trillion budget in this financial year even as the country is hit hard by the COVID-19 pandemic.
As Kenya Revenue Authority (KRA) seeks to bridge its tax shortfall, the taxpayer will have to bear the burden and pay the ultimate price as
In case the National Assembly gives the proposals a go-ahead for the finance bill, food prices are expected to rise. For instance, a loaf of bread which is currently retailing at Ksh.50 will go up by Ksh.8
This means that the proposed taxation will see the cost of bread increase with the government imposing 16 percent vat on the commodity.
The government is expected to raise at least half of the Ksh.3.6 trillion budget in this financial year even as the country is hit hard by the COVID-19 pandemic.
Infant powder milk has also been targeted, the price set to go up after the imposition of a 16 percent taxation.
Borrowers will also be hard hit by the new proposal which subject loans to a processing fee of 20 percent excise duty, this means lenders will pass the cost to the borrowers making loans more expensive.
This notwithstanding the fact that the government already removed the capping on interest rates and allowed banks to charge in line with the central bank rate.
And in what is likely to drive out a number of players in the extractive industry to some neighbouring countries, the bill seeks to introduce a 10 percent duty on the operations relating to oil, gas and mining.
The tax measures contained in the 2021 Finance Bill however has good news for internet users who will benefit from lower charges as those buying internet data services in bulk for onward selling will be able to credit excise made to the supplier, thereby passing on the gains
In the 2021/2022 budget policy statement, the National Treasury revealed that it was anticipating an over Ksh. 140 billion rise in interest payments on public debt this expected to eat further into the country’s revenue.
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