Economy

Kenyans oppose VAT on basic food items

ipsos

Kenyans are against imposition of Valued Added Tax (VAT) on basic food items, a new Ipsos Synovate poll shows.

Kenyans are against imposition of Valued Added Tax (VAT) on basic food items, a new Ipsos Synovate poll shows.

The poll, conducted for two days after the Budget was read, found that 86 per cent of the 1,543 respondents were against the move which would lead to a rise in the prices of affected commodities.

The measure was disliked by 58 per cent of the respondents, making it the most unpopular in the Budget read by Treasury Secretary Henry Rotich on Thursday last week.

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Insistence that landlords must pay income tax was the second most disliked item, reflecting tenants’ fears that the move could prompt increases in rent. Nine per cent of those interviewed opposed the proposal.

In the nine months ending March 31, the Kenya Revenue Authority (KRA) had collected about Sh450 million from rental income even though it has a target of Sh3 billion. Landlords threatened to impose higher rents if they were forced to pay tax.

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Among the things people interviewed said they liked about the Budget was removal of maternity fees.

The opinion poll showed that rural people appreciated the free maternal option more than their urban counterparts. Of the 23 per cent who mentioned their liking for the free maternity care move, 65 per cent came from rural areas while 35 per cent were urban.

Ipsos Synovate noted that across Kenya, 75 per cent of all maternal deaths occurred during delivery and the post-partum period, with 58.7 per cent of all births taking place at home.

Survival rates

“Rural Kenya has 81 per cent of all births occurring across the country… Rural populations frequently experience worse child survival rates than their wealthier, more urban counterparts,” noted Ipsos Synovate in a statement.

The second most popular measure was allocating cash for youth businesses — at 12 per cent — and a subsidy for employers to recruit graduands at nine per cent.

Mr Rotich said that the government would engage more youth in business through revised public procurement regulations and a new framework of delivering financial support.

“In response to the employers’ reluctance to hire inexperienced job-seekers, initiatives are under way to improve information services to help young people access jobs and training opportunities,” said Mr Rotich.

The Finance Secretary said the government would develop a subsidy programme for employers that would lower the cost of hiring young people without work experience within the shortest time possible.

“Under consideration is a tax rebate to tax-compliant businesses and NGOs who hire inexperienced youth graduating from our educational institutions,” said Mr Rotich.

Of the 1,543 interviewed, 961 respondents or 62 per cent said they had followed Budget reading keenly while the rest said they had at least heard from others about it.

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