NAIROBI, Kenya, May 12 – Kenyans are set to brace themselves for tough times ahead following the proposed 16 percent VAT on bread, which will see the price of the commodity skyrocket.
According to the new proposal by the National Treasury under the Finance Bill 2024, the price of Kenya’s favorite breakfast meal is set to rise by at least Sh10.
Currently, bread is VAT-zero-rated. The inclusion of the 16 percent will shut up the prices from 60 to 70.
On the Finance Bill 2023, the introduction of an 8 percent increase to 16 percent VAT on fuel, among others, sparked a public outcry. This 16 percent on bread will certainly raise nerves among Kenyans.
The new proposals have suggested the rise of excise duty on fees for mobile money transfer services such as M-Pesa and money transfer charges in banks and Saccos to rise from 15 to 20 percent.
Furthermore, the cost of beer is set to decrease after the new bill proposed an excise duty of Sh142.44 per litre down from Sh253, while the cost of stronger spirits and whiskey is set to rise as the excise duty is set to rise from Sh253 to Sh356.
The new Finance Bill 2024 has further proposed the introduction of a motor vehicle tax, levied at 2.5 percent of a vehicle’s market value.
The government says the new tax is designed to provide a steady revenue stream to support the government’s ambitious development projects.
The bill specifies that the tax will range from a minimum of Sh5,000 to a maximum of Sh100,000, payable at the time an insurance policy is issued.
