CORD seeks waiver on amending VAT Act

September 19, 2013 4:18 pm
Budalang'i MP Ababu Namwamba is leading the CORD push for changes to the VAT Act. Photo/ FILE
Budalang’i MP Ababu Namwamba is leading the CORD push for changes to the VAT Act. Photo/ FILE

, NAIROBI, Kenya, Sep 19 – Opposition MPs on Thursday requested the Speaker of the National Assembly Justin Muturi to waive the six-month period barring the amendment of the VAT Act.

Suba MP John Mbadi and Budalang’i MP Ababu Namwamba have submitted an amendment Bill that seeks to exempt infant milk, processed milk, mosquito and fishing nets to the Speaker’s office.

“I hereby request you to invoke the provision of Standing Order 49 (2) to allow the processing of this Amendment despite provisions of Standing Order 49(1). This is informed by the outcry of the public concerning the effects of excluding some essential and basic commodities from the schedules of the Act,” Mbadi explained.

“There is a precedent… I remember in the 10th Parliament we passed the Vetting of Judges and Magistrates Bill and we amended it almost immediately, because the Speaker then, waived the provision.”

The MPs suspended House business on Tuesday to discuss the impact of the Value Added Tax Act whose implementation has led to the skyrocketing prices of essential commodities.

The CORD sponsored Bill also exempt VAT on postal services and mobile money transfer transactions of amounts not exceeding Sh10,000 and supply of electricity to households restricted to 200 kilowatt hours and supply of water drilling equipment.

The proposed Amendment Bill seeks to enhance avenues for further entrenchment of public participation and provides for the inclusion of specific organizations that have mandate of consumer protection.

Mbadi wants to do this by amending Section 6 (1) if the Act by inserting the words, “subject to stakeholder consultation which must include consumer protection agencies and federation.”

CORD also seeks to increase the penalty for tax fraud to deter malpractices.

“It provides for the alleviation of certain basics products that are in the basket of the poor from VAT in order to promote a cohesive and inclusive society.” the Suba MP continued. “This is also expected to reduce the costs related to the administration and compliance while not significantly affecting he revenue obtained from VAT”

This will open a fresh battlefront with President Uhuru Kenyatta’s government that pushed through the VAT legislation, which drastically reduced the number of items that are zero-rated.

The intention was to, among others things; raise an additional Sh10 billion in revenue for the government.

The opposition said they expect the Bill will be scheduled to be tabled before the House Business Committee (HBC) next week.

In their amendment, CORD intends to zero rate supplies of the Rural Electricity Authority.

Given its minority, CORD is working on a strategy to rope in there Jubilee counterparts to support and even add some more amendments of the VAT Act.

Namwamba said it was wrong for the government to tax essential commodities saying there are other economic ventures which the government should have taxed.

“This would have avoided a scenario where people will go hungry because they cannot afford to buy essential commodities,” he said.


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