Kuria Kimani, the Chairman of the National Assembly Finance Committee and Molo MP, recently explained the reasoning behind the Treasury’s proposal to introduce a 16% Value Added Tax (VAT) on bread. During an appearance on Citizen TV’s ‘Tonight’ show, Kimani revealed that the Treasury’s proposal stemmed from concerns about the high prevalence of diabetes among bread consumers.
Kimani elaborated that the Finance Committee engaged in extensive discussions with the Treasury regarding the proposed VAT on bread. While acknowledging the widespread sentiment among Kenyans that bread is considered a staple food product rather than a luxury item, Kimani emphasized the Treasury’s focus on addressing health-related concerns such as diabetes.
This revelation sheds light on the government’s perspective behind the proposed VAT on bread and underscores the importance of balancing public health considerations with economic policies.
“The arguments we are receiving from Kenyans is that bread is not a luxury good. People have it every morning for breakfast,” said Kimani.
“We have received this proposal and are asking Kenyans what their views about it are. As a committee, we will weigh the Treasury’s sentiments against what Kenyans are saying before making an informed decision on the proposal and its impacts.”
Kimani additionally highlighted a concern regarding the shift in consumer consumption patterns should the 16% VAT be imposed on bread.
“Some of the arguments raised is that in addition to bread sold in the supermarket, there’s also bread baked in informal shops and if you tax the bread in the market, people will move from that formal bread to breads baked on the roadside and by these small bakeries which could raise more health concerns,” he said.
“I want to reiterate this, these are proposals and the Committee of Finance and National Planning is asking Kenyans to give their views.”
Kimani further outlined three possible courses of action in regards to the bread tax proposal: introducing the proposed VAT on bread, making bread tax-exempt, or reverting it to its previous zero-rated status.
“Bread has been zero-rated so the three options are it continues to attract 16 percent of VAT as proposed in the bill, the other option is to make bread tax exempt or take it back to zero-rated,” he said.
“We will take everything into consideration when doing our report before taking it to Parliament.”
