In a new Gazzetted Value Added Tax reduction, Kenyans will now pay for key commodities like electricity, cooking gas, detergents, and processed foods among others starting mid next week.
Processed foods include maize flour, rice, and cooking oil. Raw foods are exempted from the tax.
Following the directive by President Uhuru Kenyatta to reduce the taxes due to the constraint the coronavirus is setting on Kenyans, Treasury CS Ukur Yatani cited in the the legal notice that the taxes would be cut from 16pc to 14pc.
“I recognize the anxiety that this pandemic has caused millions of Kenyan families; fearful of what the future may hold for them and their children. And the possibility of job losses and loss of income weighing heavily on their minds,” President Kenyatta had said while ordering a reduced tax rate to ease the pain on households.
The tax cut means the Kenya Revenue Authority (KRA) is yet again set to miss it’s target this financial year, a move which Analysts have said will dent the econmy massively.
In the first six months of the 2019/2020 financial year, the taxman netted Sh857.8 billion, missing its target by Sh88.3 billion.
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