Mbadi Targets Diapers, Sanitary Pads in Latest Tax Changes
Kenyans might have to dig deeper into the pockets for diapers and sanitary towels after the government plans to revoke its initial plan to convert them from zero-rated to exempt status under the Eco Levy.
“The above measure will have the effect of increasing the cost of supplies since the exemption does not provide relief for input VAT incurred and the cost will be passed on to the final consumers,” read the proposed move by former Cabinet Secretary for National Treasury Njuguna Ndung’u in June.
The Eco Levy, a proposal under the Miscellaneous Fees and Levies Act (MFLA) aimed at charging manufacturers and importers whose goods affected the environment.
President William Ruto halted this move after Kenyans went to the streets 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 & raw materials (locally or imported) supplied to manufacturers of agricultural pest control products.
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 be pricier.
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