Wednesday, November 6, 2024 – Kenyans might have to pay more for
diapers and sanitary towels after the government plans to resuscitate its
initial plan to convert them from zero-rated to exempt status under the Eco
Levy.
While items under the exempt schedule do not
attract the 16 per cent Value Added Tax (VAT), the manufacturers cannot,
however, claim the input tax on the items used to produce the final
product, forcing the suppliers to pass on the cost to the final consumer.
Moving zero-rated goods to the exempt status
will drive up the consumer prices of sanitary towels and diapers, items that
already cost high for Kenyans.
The Eco Levy, a proposal under the
Miscellaneous Fees and Levies Act (MFLA), is aimed at charging manufacturers
and importers whose goods affected the environment.
President William Ruto halted this move after
Kenyans went on a rampage and protested against the Finance Bill 2024. The Bill
had proposed only the exported goods and services would be zero-rated.
According to the Cabinet Secretary, the move
to give the exempt status aimed to reduce the government’s tax expenditure of
the government’s estimated revenue forgone after giving tax concessions or
preferences to a particular class of taxpayer or activity.
Apart from the diapers and sanitary towels,
other items that have been reclassified from zero to exempt status are inputs
and raw materials (locally or imported) supplied to manufacturers of
agricultural pest control products upon recommendation.
Fertilizers and the raw materials used to
manufacture these inputs, as well as pesticides and the raw materials used to
manufacture them are also expected to shoot up in prices.
The Kenyan DAILY POST
