Commodities

Bread price to jump Sh6 on tax plan

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A supermarket attendant arranging loaves of bread on a shelf in October 2020. PHOTO | EVANS HABIL | NMG

geraldandae

Summary

  • The price of bread will rise by Sh6 if the government implements 16 per cent value added tax(VAT) on the commodity, bakers have said.
  • The Finance Bill 2021 has proposed the introduction of 16 per cent duty on bread effective July this year should it be adopted, reversing the current trend where the commodity enjoys a zero-rated status.

The price of bread will rise by Sh6 if the government implements 16 per cent value added tax(VAT) on the commodity, bakers have said.

The Finance Bill 2021 has proposed the introduction of 16 per cent duty on bread effective July this year should it be adopted, reversing the current trend where the commodity enjoys a zero-rated status.

Mr Bimal Shah, the managing director of Broadway Group of Companies said the duty does not augur well for both the industry and consumers.

“It is a wrong move to introduce a 16 per cent duty on bread as this will increase the cost and make it expensive for ordinary Kenyans who are already grappling with high cost of production,” said Mr Shah.

Mr Shah said the additional tax will affect the movement of bread on the shelve, with retailers expected to return more unsold loaves.

Cost of bread has since January gone up two times on sharp rise in price of wheat.