A lot has been said about VAT Act 2013 and some characters who think they are more experts on these matters have been quick to lecture us since we are laymen and presumably our responses are just driven by emotions. For all the laymen who seek to understand these issues I would refer you to the proposals which were made by ICPAK in 2012 on the then VAT Bill. Just to quote one part: "Treatment of Basic Commodities We have noted that the Bill is a significant improvement on the current VAT Act. However, it does not take cognizance of the potential impacts of standard rating all supplies including the basic commodities. It has been demonstrated that upon enactment, the new VAT Act would increase prices of basic commodities such as maize flour, milk, bread, among others that were hitherto zero rated by 16%. For its intent and purpose, the Bill should provide a middle ground in the treatment of basic commodities. The counter argument against blanket zero rating would be that such a system would extend this benefit to the rich and undeserving segment of society and that Government would work ways and means of administering subsidies to cover the poor. Historically this has been a feat hard to achieve and the concerned benefits would in our view not reach the intended disadvantaged part of our society not to mention to consequential costs. We will attempt to define basic commodities as the essential goods that support life and the desire would be to link these goods to what social scientists would define as the goods meeting the basic core needs. Given the diverse nature of the people of Kenya, it may not be tenable to prescribe a conclusive list of the basic commodities. Consequently, it will add value to consider empowering the Cabinet Secretary to prescribe the commodities to be considered as basic commodities. The defined basic commodities would then be taxed at zero rate to accrue cost savings to consumers."
Posted on: Fri, 06 Sep 2013 13:07:30 +0000
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