The Consumer Federation of Kenya (Cofek) has urged members of Parliament to reject the VAT bill tabled before the National Assembly by the leader of majority and Member of Parliament for Garissa township Aden Duale.
Cofek has said that while the expanded system of government automatically translates to a higher expenditure for the government, hence needing more sources of income, the government should look into other avenues of raising the deficit of the budget which is largely funded by taxes.
The organisation at a luncheon at the Panafric Hotel urged the government to look into alternative avenues of sourcing the deficit of the huge budget adding that increasing tax on previously zero-rated will raise the standards of living and increase poverty.
“Enhancing consumption tax by targeting the majority poor is not only politically insensitive but it remains a serious economic blunder. Loading a 16% tax on food items and farm inputs is self-defeating and a short term relief for government but a long-term pain for the economy,” said Stephen Mutoro, the Cofek Secretary General.
Muroto further said the government should look into establishing tax harmonization and reform measures to enable the economy not to rely on imports but also to develop the exports sector.
Mutoro further accused the International Monetary Fund of arm twisting the country by pegging donor funding on the adaptation of the VAT bill.
“We have sufficient proof and evidence to show that the VAT Bill originates from the IMF and not from our Treasury. The fact that the Bill has been on the parliamentary queue for over 3 years explains its unpopularity and ulterior motive,” Morotu said.
The VAT bill was tabled in Parliament last year by then Minister for Finance Njeru Githae who proposed to levy the VAT tax on previously zero-rated goods which are mainly foodstuffs to service a budget deficit.
- See more at: http://www.the-star.co.ke/news/article-124065/consumer-body-urges-mps-oppose-vat-bill#sthash.kwCW7exg.dpuf
The Consumer Federation of Kenya (Cofek) has urged members of Parliament to reject the VAT bill tabled before the National Assembly by the leader of majority and Member of Parliament for Garissa township Aden Duale.
Cofek has said that while the expanded system of government automatically translates to a higher expenditure for the government, hence needing more sources of income, the government should look into other avenues of raising the deficit of the budget which is largely funded by taxes.
The organisation at a luncheon at the Panafric Hotel urged the government to look into alternative avenues of sourcing the deficit of the huge budget adding that increasing tax on previously zero-rated will raise the standards of living and increase poverty.
“Enhancing consumption tax by targeting the majority poor is not only politically insensitive but it remains a serious economic blunder. Loading a 16% tax on food items and farm inputs is self-defeating and a short term relief for government but a long-term pain for the economy,” said Stephen Mutoro, the Cofek Secretary General.
Muroto further said the government should look into establishing tax harmonization and reform measures to enable the economy not to rely on imports but also to develop the exports sector.
Mutoro further accused the International Monetary Fund of arm twisting the country by pegging donor funding on the adaptation of the VAT bill.
“We have sufficient proof and evidence to show that the VAT Bill originates from the IMF and not from our Treasury. The fact that the Bill has been on the parliamentary queue for over 3 years explains its unpopularity and ulterior motive,” Morotu said.
The VAT bill was tabled in Parliament last year by then Minister for Finance Njeru Githae who proposed to levy the VAT tax on previously zero-rated goods which are mainly foodstuffs to service a budget deficit.
- See more at: http://www.the-star.co.ke/news/article-124065/consumer-body-urges-mps-oppose-vat-bill#sthash.kwCW7exg.dpuf