More Basic Commodity Taxes Spell Doom for Kenyan Households

An additional tax touching on the essential commodities in the recent Budget proposal read by Ukur Yatani has brought about a heated debate, with the common Mwananchi expressing their dire disappointment in the government.

In a bid to raise a 50.4 billion shillings additional tax, the CS proposed A 16 percent VAT Tax on maize, which is a staple food for most Kenyans.

With this, the Treasury proposes removing the supply of maize flour, cassava flour, Wheat, and Meslin flour from the list of zero-rated value-added tax.

Other adjustments include excise duty on bottled water, whose price will increase to 6.60 shillings per liter from the previous 6.03 shillings.

Furthermore, fruit juice prices are set to go up to 13.30 shillings per liter from the current 12.70 shillings if the proposals are approved.

What does this mean for Kenyans who have been grappling with a high cost of living due to various factors such as drought and a shoot in the price of other basic commodities since the year began?

Already most Kenyans cannot afford a basic meal. Further increase in the taxes means increasing the prices, which means Kenyans will continue to suffer in the land owned by a few wealthy bosses who can afford the cost.

Commodity prices have been rising, with cooking oil taking the lead in price, shooting from an average of 15o shillings in September 2021 to 380 shillings for a liter in April 2022.

Kenya now falls among countries with the high cost of living globally, with all the pain trickling down to the Mwananchi. Across the major supermarkets, sugar retails highest at 260 shillings per 2Kg, Wheat flour goes for 170 shillings per Kg, and the 400g bread costs 60 shillings up from 55 shillings a month ago.

The table below shows the prices of some basic commodities in different shopping outlets as of April 2022.

Apart from the basic commodities, the rate of excise duty for beer not exceeding six percent by alcohol strength has been proposed at 134 shillings per liter from the current 121.85 shillings while that of spirits with an alcohol content above six percent is proposed at 335.30 shillings from the current 278.70 shillings.

Meanwhile, the rate of duty for cosmetic and beauty products as well as jewelry has been proposed at 15 percent from 10 percent.

Other commodities captured in the excise duty adjustments include wines, cigars, cigarettes, motorcycles, and imported sweets.

Kenyans who expected the Treasury to offer tax reliefs on essential commodities such as cooking gas and fuel, which are trading at record prices have now been forced to reduce their shopping basket in an environment where firms have frozen salaries as they recover from Covid-19 economic hardships.