editorial
Delay or suspend new taxes
Thursday, August 12, 2021
MPs during a session in the parliamentary chambers. PHOTO | FILE
From BUSINESS DAILY
Summary
- The National Assembly should carefully examine the proposed adjustment of taxes on a variety of goods to the inflation rate.
- Parliament should postpone the proposed tax increase or suspend it entirely for the next year. In particular, consumers of essential goods should be shielded from further price escalation.
The National Assembly should carefully examine the proposed adjustment of taxes on a variety of goods to the inflation rate.
This is the first time that the legislature will have a say in the previously automatic inflation adjustment. The law on the annual increase in excise tax was intended to protect government revenues from a loss of spending or purchasing power. A relatively mild inflationary environment and steady economic growth were also assumed.
However, as the Covid-19 pandemic has shown, economic progress can be slowed down by uncertainties. More than a million Kenyans lost their jobs and several sectors, including tourism, transportation and real estate, continue to suffer from restrictions imposed by Kenyan and foreign governments to contain the spread of the pandemic.
Most workers experience wage cuts or stagnation and have a hard time paying more for goods such as fuel, juice and bottled water, which are the target of the tax officer's excise duty hike.
Parliament should postpone the proposed tax increase or suspend it entirely for the next year. In particular, consumers of essential goods should be shielded from further price escalation.