Rotich scraps taxes on maize flour, bread in budget proposal

Cabinet Secretary Henry Rotich (centre) outside Treasury before presenting his budget proposals for the 2017/2018 financial year, MArch 30, 2017. PHOTO | NMG 

By EDWIN OKOTH

More by this Author

Summary

• The tax interventions include duty-free importation of maize in the next four months.
• The government has also proposed to raid betting, lottery, gaming and competition firms with a heavy 50 per cent tax.
• The budget is also full of incentives to attract foreign investments and protect locally manufactured good

The government has moved to address the increasing cost of maize flour in the budget proposals read by Treasury Cabinet Secretary Henry Rotich.

The tax interventions include duty-free importation of maize in the next four months and the removal of value-added tax on both bread and maize flour

Mr Rotich said the two basic commodities are expected to be cheaper after the exemptions, warning millers and bread manufacturers of a reversal should they fail to translate the benefits to the consumers.

“In order to make these commodities affordable for the common mwananchi, I propose to zero-rate bread and maize flour to remove VAT altogether.

"Manufacturers, wholesalers and retailers who sell such goods will be expected to reduce the prices of these basic commodities, failure to which, I will reverse the policy,” Mr Rotich said.

AS IT HAPPENED: Budget speech 2017

Betting firms

The government has also proposed to raid betting, lottery, gaming and competition firms with a heavy 50 per cent tax for all categories.

The proceeds, according to the budget plan, will be put in the newly created National Sports, Culture and Arts Fund to support development of sports, culture and arts in Kenya.

The Jubilee administration also outlined key achievements in the last four years as it presented final expenditure plan before the August elections.

Mr Rotich, who has been holding the budget briefcase for the fourth time, took time to demonstrate how the government has made progress in improving security, infrastructure, education, healthcare and access to electricity with more allocations set for the sectors

Foreign investments

The budget is also full of incentives to attract foreign investments and protect locally manufactured goods.

Income tax bands have also been increased by a further 10 per cent, raising the lowest taxable income to 13,486 from the current Sh11,135 in what will be an extended relief to low-income earners.