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The Treasury has also denied allegations that there is pressure from the International Monitory Fund (IMF) to quickly pass the Bill to raise revenue/FILE

Kenya

Treasury calms down nerves on VAT Bill

The Treasury has also denied allegations that there is pressure from the International Monitory Fund (IMF) to quickly pass the Bill to raise revenue/FILE

The Treasury has also denied allegations that there is pressure from the International Monitory Fund (IMF) to quickly pass the Bill to raise revenue/FILE

NAIROBI, Kenya, Jun 19 – The National Treasury has downplayed fears that the re-introduced VAT Bill is aimed at raising the costs of basic goods and specifically food items.

Speaking to journalists at a forum in Nairobi, Economic Secretary Geoffrey Mwau said the Bill will likely focus on taxing the luxurious goods that may not necessarily affect the a majority of Kenyans.

Mwau has maintained that there will be consultation among all stakeholders to ensure that the proposed legislation raises the expected Sh10 billion while it considers the welfare of Kenyans.

“There is a lot of distortion in the current VAT Act and we are not bringing in these changes for the sake of it. Most stakeholders have expressed their need to see this Bill go through,” Mwau said.

He urged the media to stop preaching negativity about the Bill and instead wait until the real new draft is published and tabled in Parliament.

The Treasury has also denied allegations that there is pressure from the International Monitory Fund (IMF) to quickly pass the Bill to raise revenue.

Last year, IMF approved a Sh35 billion loan to the National Treasury to strengthen the shilling and tame inflation, a move that is claimed to have come with some conditions one of them being to pass the VAT Bill.

“I will say this and will always repeat, there is no pressure from anyone. We are a sovereign government and we have our own programmes. What I would say is that, they (IMF) would want to keep on monitoring to see if what we plan meets the international standards. In any case, if you know the compliance burden with the current VAT Act, you wouldn’t think twice to reform it,” Mwau said.

“We should be focusing on how the new VAT Act should reduce delays in VAT refunds,” he said.

Presenting the 2013-2014 budgets, Finance Cabinet Secretary Henry Rotich said the VAT Bill will be reintroduced in Parliament “with an aim of simplifying, modernising and reducing the cost of compliance.”

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The new VAT Bill will be complete and ready for tabling parliament by December this year.

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