Basic goods and services such as electricity, airtime, cooking oil, detergents, and pay-TV subscriptions will from today suffer a hike in price after the restoration of Value Added Tax (VAT) to 16 pc from the current 14pc.
The revised prices comes after lawmakers voted to end tax cuts put in place in April to cushion Kenyans ravaged by the Covid-19 pandemic from January 1st. The move is aimed at increasing revenue generation in order to help the dented economy recover.
Top companies like telco Safaricom, KPLC and Multi-Choice Wednesday will have to adjust their product prices in line with the VAT increase. For instance the cost of electricity will rise after the 2pc increment in VAT kicks in.
Families recovering from depressed earnings which on average, consume power worth Sh1,000 monthly, will pay nearly Sh20 more from January 1.
Safaricom subscribers buying Sh100 airtime will no longer get additional Sh2 of talk time when the telco adjusts its prices in line with the rise in VAT, while those buying data bundles worth Sh2,900 for home use will lose Sh58 additional Internet.
Other goods that will attract the higher VAT are newspapers, books, phones, electronics, computer hardware and software.
The revision comes as Kenyans face cuts on their net earnings from tomorrow with the withdrawal of income tax reliefs imposed in April.
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