Uhuru Kenyatta lobbies Jubilee MPs over VAT Bill, teachers’ strike
What you need to know:
If passed in its current form, the Bill would see the prices of many basic commodities surge by 16 per cent after their tax exemption status was withdrawn.
Cord MPs said they would not accept the Bill until basic food items, which were previously zero-rated, are accorded the same status or exempted in the proposed law.
President Kenyatta summoned all Jubilee MPs to State House for a Parliamentary Group meeting, which was used to seek a common position on the Bill and the ongoing teachers' strike.
The controversial Value Added Tax Bill 2013 split the National Assembly down the middle when it was tabled Tuesday just hours after the Executive lobbied legislators to support the proposed law.
If passed in its current form, the Bill would see the prices of many basic commodities surge by 16 per cent after their tax exemption status was withdrawn.
“We as minority party will rally against the passage of the law. Kenyans are struggling to put a meal on the table. We can’t allow maize flour, milk and even paraffin to become more expensive,” said Zainabu Chidzugu, the Kwale County MP, on behalf of the Coalition for Reforms and Democracy (Cord).
Cord MPs said they would not accept the Bill until basic food items, which were previously zero-rated, are accorded the same status or exempted in the proposed law.
“You cannot raise money through taxing poverty. Basic food items must be reinstated in the list of items that do not attract any tax,” Suba MP John Mbadi said.
President Kenyatta summoned all Jubilee MPs to State House for a Parliamentary Group meeting, which was used to seek a common position on the Bill and the ongoing teachers' strike.
Subukia MP Nelson Gaichuhie said President Kenyatta asked the MPs to meet with the Cabinet Secretary, Francis Kimemia, so that they could be briefed on the contents of the Bill before another meeting scheduled for Monday.
‘‘The President emphasised the need to pass the law. We agreed that we meet next Monday again so that we tackle the issue,” Mr Gaichuhie said.
He said the Parliamentary Group meeting also dealt with the nomination of Njee Muturi as the Solicitor- General which the National Assembly approved in the afternoon.
“That is what took a lot of the time and time was not there to deal with the VAT Bill,” he said.
After it was introduced in Parliament, the VAT Bill was referred to the Finance, Planning and Trade committee for scrutiny.
The Bill will be debated after the committee files its report to the House within the next seven days. The Bill, which was first shelved by former Finance minister Njeru Githae in the 10th Parliament after MPs threatened to shoot it down, seeks to review and update the law relating to VAT.
The proposed law includes basic commodities like food, medicine, and agricultural inputs in the list of goods that qualify to be charged VAT.
The Bill proposes to tax all food items except in the raw state while electricity which currently attracts a 12 per cent tax will rise to 16 per cent if the Bill becomes law.
Imported medical supplies and equipment including human medicines would also be charged VAT at the standard rate of 16 per cent as would ordinary paper and newsprint, raising the cost of exercise books, newspapers and journals.
Diapers, urine bags, and mosquito nets, among other sanitary materials would also become more expensive if Parliament passes the Bill as proposed.
The Bill reduced the number of zero rated or tax exempt goods from about 400 to only 42. The proposals have since attracted opposition from consumer groups with Consumer Federation of Kenya (Cofek) secretary general leading a demonstration outside Parliament yesterday to protest against the reintroduction of the Bill.
"The Jubilee government is not interested in addressing the plight of the poor. The VAT Bill is not in the interest of ordinary citizens,” said Tigania East MP Mpuri Aburi.
Ms Chidzuga said Cord will not allow the girl child to drop out of school due to taxation on sanitary towels and other basic necessities. “This government wants to let Kenyans sleep hungry. We will oppose it as leaders. We will stand with Kenyans,” she said.
The Bill seeks to raise Sh10 billion in extra revenue for the government unlike Sh40 billion that was to be raised with the previous Bill.
