Finance Minister Njeru Githae says he will table the troubled Finance Bill when parliament resumes on 17th of April. Githae said treasury and the parliament had agreed on everything except the additional revenue that the Kenya Revenue Authority (KRA) has collected from January 2012 to date.
The Finance Bill 2011 proposed to make changes in VAT rates through the VAT bill by scraping the lower 12% rate on residual fuel oils leaving only the 16% and 0% VAT rates. Should this happen, the new VAT rate wouldii increase prices of crucial supplies like electricity and oil and hurt the consumer in the process.
“I will table the bill on the 17th of April when parliament reopens and I believe it will be passed because we have agreed to work out on several issues and the remaining issue is the additional revenue KRA has collected from taxes.” He said.
Parliament had declined to pass the Finance Bill 2011/12 with amendment proposals seeking to cap interest rates and other changes. This put the government at risk of refunding money collected from taxes without MPs’ approval. The law allows the Finance minister through KRA to collect taxes for six months. At the expiry of the six months, the Treasury is expected to have pushed the Finance Bill through Parliament or seek MPs’ authority to extend the period.
Githae who was speaking at the opening of Ecobank Karen branch urged banks to lower their lending rates and pay their clients double digit interest citing growth of deposits by banks from Shs 936 billion in 2008 to Shs 1.6 trillion last year.
Read more on interest capping debates.