By INTELLECTUALS POSTS
Tuesday June 11,2024
Home News EAT ALTERNATIVES IF YOU DON’T WANT TO PAY TAX– RUTO tells hustlers.
BY Khamati Mwabaka
Tuesday, June 11, 2024 – President William Ruto has moved to justify the proposed tax on hustlers’ food (bread and milk) even as Kenyans reject the Finance Bill, 2024.
Speaking yesterday, Ruto, through UDA Communication Director Arnold Maliba, explained the government’s rationale behind the proposal to add Value value-added tax on basic commodities such as bread and milk.
According to Maliba, the government resolved to remove the two products from the VAT-exempt list as a means to reduce the recurrent expenditure within the national budget.
Maliba opined that the government had been spending huge sums to reimburse manufacturers through tax returns for Zero-rated commodities.
“At the moment, bread and milk are zero-rated, meaning the suppliers and manufacturers normally then claim refunds on inputs they paid (for). The two products attract the highest expense in tax, which the government would reimburse,” stated Maliba.
For a “zero-rated good,” the government doesn’t tax its sale but allows credits for the value-added tax paid on inputs, which allows the manufacturers to claim reimbursements from the government.
However, if a product or business is “exempt,” the government doesn’t tax the sale of the product, but producers cannot claim a credit for the VAT they pay on inputs to produce it.
He further alluded that taxing bread and milk would ease the cost burden of shouldering the tax burden on those who do not consume the products.
According to Maliba, there are alternatives for Kenyans such as unprocessed foods like arrow roots and unprocessed milk.
Therefore, Maliba opined that Kenyans can consume the alternatives without coughing up the funds for bread and processed milk after the VAT addition.
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