Mbadi moves motion to amend VAT bill

By ALPHONCE SHIUNDU

Kenya: The National Assembly Wednesday began debating a Bill that seeks to amend the Value-Added Tax Act. The Bill seeks to reduce the price of goods and services.

Suba MP John Mbadi initiated debate on the VAT (amendment) Bill and urged the House to back him to ensure the cost of living in the country comes down.

“There is no shop for Cord, or ODM, and there is no shop for Jubilee. We all suffer when the prices of goods go up. If we pass this Bill, it is going to send a signal to the economy that prices have to come down. The net benefit will be a low inflation rate,” Mbadi said.

The Bill seeks to exempt fishing nets, milk, mosquito nets, ambulances and hearses, sanitary and pest-control services, animal feeds, insecticides, fungicides and herbicides and the supply of water drilling services from the 16 per cent tax.

“We need to exempt fishing nets made of manmade textile materials from this tax, so that our fishermen and women can access cheaper nets,” he said.

 “In some communities, we value the dead. If you do not give the dead a decent burial, we believe you will be haunted. That is why we want the ambulances and hearses to be exempted from the 16 per cent VAT.”

The proposed law also seeks to have all households who use electricity of up to 200 kilowatt/hours and supplies to the Rural Electrification project should exempted.

“Charging VAT on electricity has made life very expensive. There was no reason why this had to be taxed. It was previously zero-rated. If we leave this tax here, there will be a rise in electricity tariffs and inflation,” he argued.

The Suba legislator said those making fraudulent claims for tax refunds should be fined five times the claim.

“In order to discourage such fraudulent tax claims, we need to have a very harsh penalty,” he said.

Deputy Minority Leader Jakoyo Midiwo (Gem), Benjamin Langat (Ainamoi), Benson Makali (Kitui Central), Nicholas Gumbo (Rarieda), Richard Makenga (Kaiti), Ababu Namwamba (Budalang’i), led their colleagues in backing Mbadi.

Midiwo said the National Treasury should not seek to stifle the amendments to the VAT Act that came into force on September 2 last year.

The Parliamentary Budget Office says the amendments will create a Sh4.2 billion deficit revenue targets.

“If you do not rectify these things, you will begin seeing negative growth in the economy,” said Midiwo.