The chairman of the National Assembly Finance and National Planning Committee Kimani Kuria has disclosed that the proposed 16% VAT on bread stems from a notion that bread consumption contributes to diabetes. In an interview with Citizen TV’s Sam Gituku on Thursday, May 16, Hon. Kuria explained that the recommendation was made by the National Treasury, citing health concerns as a driving factor.
“The initial thinking was there was a concern about bread and diabetes,” Kuria stated. He emphasized that the committee will consider the Treasury’s recommendations alongside public opinion. He also noted that, “other than bread being sold in supermarkets, there are also bread being baked in informal shops across the country. If you tax the bread in the formal markets, people will move to the bread baked by the roadside and informal shops, which could mean more health concerns.”
The Finance Bill 2024, which includes this VAT proposal, could see the price of a 400g loaf of bread increase by at least 10 shillings if passed into law. In addition to the VAT on bread, the bill proposes a motor vehicle circulation tax, payable annually at 25% of the vehicle’s value, with a minimum of Ksh. 5,000 and a maximum of Ksh. 100,000. It also suggests raising excise taxes on mobile money transfer services and airtime and data from 15% to 20%, among other taxes.
Hon. Kuria reassured the public that these are merely recommendations at this stage, affirming that the views of all Kenyans will be considered, and a suitable decision reached.
