Proposed tax rules to keep unga prices high

Thursday, July 7th, 2022 21:19 | By
consumers unga
Unga. PHOTO/Courtesy

The National Treasury has floated the Draft National Tax Policy, which is set to keep maize flour (unga) prices in Kenya high in case it is implemented.

The tax policy aims to remove a number of consumables from the zero-rated list, including maize flour, cassava flour, wheat and meslin flour.

“VAT zero-rating shall be limited to exported goods except transportation of passengers and supply of taxable services by carriers on international voyage or transportation of goods by land for destination terminating outside Kenya,” the tax policy reads in part.

Zero-rated unga

Despite being included in the VAT-exempt supplies according to the current VAT Act, the price of unga will remain high since its supplies would not be able to claim input VAT from the Kenya Revenue Authority (KRA).

If implemented, the policy will also see the return of presumptive tax for the informal and agricultural sectors in the country.

The Draft National Tax Policy also seeks to raise ordinary revenue as a share of GDP to 15.3 per cent and also enlist additional 2.1 million active taxpayers to raise the total number of taxpayers to 8.2 million.

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