The government has removed tax on bread, maize and wheat to lower food prices and ease pressure on inflation in the 2017 Budget.
While reading the national budget in parliament yesterday, National Treasury cabinet secretary Henry Rotich said that bread and wheat flour will no longer attract the 16 per cent value added tax.
This means that bread currently retailing at Sh. 50 should drop by Sh. 8 if the bakers pass on the tax benefit to consumers.
“Bread and maize flour are VAT exempt, which means they do not benefit from deduction of input tax,” said Mr Rotich. “In order to make these commodities affordable for the common mwananchi, I propose to zero rate bread and maize flour”.
The price of maize 90 kilogramme bag has hit a record Sh. 4,200, up from Sh. 2, 800. This has increased a packet of maize flour to Sh. 140 from Sh. 80 over the period.
Kenya National Bureau of Statistics says that between December and January, food and non-alcoholic drinks’ index increased by 1.66 per cent.
This was attributed to increases in prices of cabbages, spinach, sukuma wiki, maize flour, wheat flour and maize grain which were contributed by the drought.
