The ever thinning revenue sources amid an increasing expenditure at a time when the country is battling the Covid-19 pandemic has had the government relook its strategies as it seeks to raise at least half of the Sh3.6 trillion budget in this financial year.
The taxpayer they will have to bear the burden and pay the ultimate price as the Kenya Revenue Authority (KRA) seeks to bridge its tax shortfall.
Some proposals in the finance bill set to see food prices rise significantly should the National Assembly give the proposals a nod
Among the basic commodities that are set to be affected by the proposed taxation measures include bread whose cost is set to increase as the government imposes a 16 percent vat on the commodity.
A loaf of bread which is currently retailing at Sh50 will go up by Sh8.
Infant powder milk has also been targeted, the price set to go up after the imposition of a 16 percent taxation.
Borrowers will also be hard hit by the new proposal which subjects loans to a processing fees of 20 percent excise duty, this means lenders will pass the cost to the borrowers making loans more expensive.
This not withstanding the fact that the government already removed the capping on interest rates and allowed banks to charge in line with the central bank rate.
And in what is likely to drive out a number of players in the extractive industry to some neighbouring countries, the bill seeks to introduce a 10 percent duty on the operations relating to oil, gas and mining.
The tax measures contained in the 2021 Finance Bill however has good news for internet users who will benefit from lower charges as those buying internet data services in bulk for onward selling will be able to credit excise made to the supplier, thereby passing on the gains
In the 2021/2022 budget policy statement, the National Treasury revealed that it was anticipating an over Sh140 billion rise in interest payments on public debt this expected to eat further into the country’s revenue.