Tougher Economic Times Ahead As Prices Of Bread, Gas Set Rise

Kenyans are likely to feel the hit as the Government is trying to mop up cash to cushion the economy during the tough times brought about by the Covid-19 crisis.

As the Covid-19 continues to bring adverse effects to the economy, the Government is forced to seek various avenues to help raise cash before things get out of hand.

Reports reveal that as of February 28, 2020, the National Treasury had only 2.8 billion shillings in the Exchequer, proving that the Government is running low on cash.

However, lawmakers have come to the government’s rescue as they proposed Tax Laws (Amendment) Amendment bill that will help raise money during this covid-19 crisis.

The tax proposals will come in handy to salvage the government but will force consumers to dig deeper into their pockets.

A good number of state resources will be used to carter for the Covid-19 emergency response which will help to sustain operations.

Taxes will now be imposed on disturbance allowances, bonuses, overtime and retirement benefits for those paid more than 24, 000 shillings per month.

State and Public Officers will now have to go without some benefits as some allowances specified for foreign trips will be taxed.

Other things that will be considered taxable include; Interest on savings accounts held with the Kenya Post Office Savings Bank, mortgages, loans by county authorities, contributions paid into the Deposit Protection Fund and all state agencies that have not been paying taxes.

All car dealers will have to pay 10,000 shillings processing fee before getting cleared at the port. Motorcycles have however been exempted.

Tax on Basic Commodities

The tax bill now seeks to remove exemptions on basic commodities which will affect people in all income brackets.

VAT exemptions on commodities like wheat, cassava, wheat, ordinary bread and any maize flour with cassava will be removed if the new Bill is passed.

Any type of bread that has wheat flour, sugar, salt, yeast, fat or oil, bread improver, preservatives, and water will now be taxed.

Other products like Fertilizers, LPG cooking gas, power generators, fishing nets of man-made textile, animal feeds, and biogas and solar equipment will all be taxed.

The tax Bill covers various items (hundreds of them) that will now be included during taxation, something will affect every Kenyan during the covid-19 pandemic.

The national assembly, led by Majority leader Aden Duale will hold a special meeting next week Wednesday to go through the proposals and decide on the way forward.