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Daily Nation : September 3rd 2013
BY JOY WANJA MURAYA @joywanjaz firstname.lastname@example.org Prices of consumer goods are expected to go up this week after the Value Added Tax law came into effect yesterday. In a paid-up advertisement in local dailies yesterday, Kenya Revenue Authority Commissioner-General John Njiraini informed the public that VAT Act 2013 had taken effect. “KRA wishes to commu- nicate the appointment by the Cabinet Secretary for the National Treasury of 2nd September 2013 as the commencement of the VAT Act 2013,” the advert read in part. The law drastically scales down the number of zero- rated and tax-exempt goods from over 400 to about 100. Unprocessed maize, milk, bread, selected medicines and seeds are some of the goods that have been exempted from VAT in the law, which has sparked public debate and fears a rise in cost of living. The goods were included in the exemption list after lobby- ing by consumer groups and manufacturers concerned about their affordability by low-income earners. Consumers Federation of Kenya secretary-general Stephen Mutoro warned that the law may hurt the public. “Some will opt for sub- standard goods that may pose health hazards, leading to ailments and diseases,” he said yesterday. He termed the passing of the VAT Act as a “risky experiment” with Kenyans welfare, and called on MPs to amend it. “Passing of the Bill was a betrayal of consumers of this country by the legisla- tors, and this will negatively affect spending patterns as more people opt for cheaper but not necessarily healthy goods,” he said. Mobile phone manufactur- ers have already said they will increase handset prices by 16 per cent in line with the new law. However, they said the price rise was likely hamper transi- tion from feature phones to smartphones and limit uptake of digital content. Supermarket chains in Nai- robi told the Nation that they had not received any commu- nication on probable price increase on commodities.“We have an agreement with sup- pliers that any price change should be communicated with a seven-day notice,” said Mr Wilfred Kimani of Nakumatt Holdings. A Tuskys Supermarket official also confirmed that there was no change in the pricing of commodities and if so, would only be effected after suppliers communicate within the set seven-day pe- riod. Dairy Producers Asso- ciation official Peter Lelei said in a meeting with milk processors today, they would challenge the cost of processed milk. The farmers accused the firms of exploit- ing consumers. “We sell milk at between Sh26 and Sh32 per litre to the various milk processors only for them to sell pasteurized milk at Sh90 per litre.” Act imposes 16pc levy on consumer products, some of which had either been zero-rated or exempted from tax VAT law pushes up food prices ECONOMY | Consumers’ lobby warns move exposes poor Kenyans to health hazards and diseases SMS ‘NEWS UPDATES’ to 20667 FILE | NATION A shopper buys sugar at Nakumatt Lifestyle Supermarket last year. Kenyans are set to pay more for basic commodities after the VAT 2013 Act came into effect yesterday. RUGBY FINAL HURDLE FOR KCB AT CHRISTIE SEVENS National Sevens Series leaders require to win Plate on Sunday to be sure of victory. P.48 SPORT INSIDE BARCLAYS PREMIER LEAGUE Arsenal move to sign German Mesut Ozil for Sh6 billion from Madrid as transfer window closes. P.51 DAILY NATION Tuesday September 3, 2013 Download free QR Readers from the web and scan this QR (Quick Response) code with your smart phone for pictures, videos and more stories.
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