Food items have been exempted from the effects of VAT Bill 2012 that is currently in parliament for debate. Finance Minister Njeru Githae told Daily Nation on Tuesday 7th August 2012 that the cabinet resolved to this move owing to pressure from the public. The Bill would have seen a 16% increase in food item prices.
This Bill comes at a time when the government intends to raise revenue to fund Vision 2030 infrastructural projects, which are aimed at transforming the nation into a medium level economy in the next 18 years.
The government is also keen to make the necessary amendments to exempt exercise books and seeds from the tax as well.