MPs Block Government's Attempts For New Taxes

Members of Parliament have blocked attempts by the Treasury to increase taxes affecting the boda boda sector.

Treasury CS Ukur Yatani had proposed to increase motorbike taxes to 15 percent of the value of a unit from a fixed charge of Ksh11,608.

“The proposal will increase the price of motorcycles and, therefore, negatively affect the bodaboda industry. In view of that, the committee rejected the proposal in the Finance Bill 2021,” the Finance Committee stated.

"The committee is unanimous that we support the boda boda industry, which has employed many Kenyans. We felt there was a need to understand the proposal further," it added.

The Finance committee also recommended that plans to raise VAT on bread be removed from the Finance Bill, 2021.

According to the Gladys Wanga chaired committee the Treasury should not impose higher taxes on maize flour, cassava flour, wheat, and maize flour containing cassava flour.

The committee opined that bread is consumed by a majority of Kenyans who are already struggling with the negative current economic climate as a result of the Covid-19 pandemic.

The budget estimate is set at Ksh3.6 trillion, and with the government allegedly "broke", the burden of the cost of the budget is set to fall on members of the public.

Ndhiwa Member of Parliament Martin Owino opposed the Treasury's move to increase taxes on essential commodities.

He urged CS Yatani to broaden the tax scope beyond excise tax, and Value Added Tax (VAT), and enable rich individuals and companies to pay more taxes as well.

"This small man needs a space to breathe and pay taxes later. We cannot do more taxes on basic commodities. You will strangle people and they will not be able to pay.

"Even SMEs, give them tax breaks. That is how you build the economy. But taxing them so that you have money which will not even trickle back to them, you are killing the tax base," Owino stated.