Bread, M-Pesa hit in new KSh323 billion government tax plan

The National Treasury plans to introduce VAT on bread and increase excise taxes on M-Pesa, bank transfers and airtime as it seeks to collect an additional KSh323 billion in taxes in the next financial year.

According to newly published Finance Bill Kenyans will pay 16 per cent value added tax (VAT) on bread at least KSh10 for a 400 grams loaf.

Bread is currently on a list of items that are zero rated for VAT purposes as well as including flour, milk and sanitary products.

Also, the cost of mobile money transfer like airtime, M-Pesa and data is set to surge in the wake of proposals to charge additional tax on the items.

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The State is intending to collects tax worth KSh2.94 trillion in the next fiscal year, up from KSh2.62 trillion in the current financial year.

In March, National Treasury Cabinet Njuguna Ndung’u said that bread was likely to be levied VAT, since it is bought by the middle class who shop in supermarkets rather than low income households.

By our reporter

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