Why Kenyans could soon pay more for sanitary pads, diapers, tampons
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Why Kenyans could soon pay more for sanitary pads, diapers, tampons

Nov 05, 2024

A representation of a tampon and sanitary towel. Photo: Reuters.

Kenyans could soon be paying more fordiapers, sanitary towels, tampons and fertilisers should the Tax Laws (Amendment)Bill, 2024, sail through.

The Bill, introduced by Treasury CabinetSecretary John Mbadi, seeks to reclassify the products from zero-rated toexempt status.

It's among three new Bills to be tabledbefore Parliament that, Mbadi argues, will assist in boosting the country'seconomic growth and bridge the fiscal deficit through enhanced revenuecollection.

The other two Bills include the TaxProcedures (Amendment) Bill, 2024 and Public Finance Management (Amendment)Bill, 2024.

A zero-rated good means that a seller doesnot charge Value Added Tax (VAT) on the sale of product but can claim back anyinput tax credits on goods they purchased to produce the product. In essence,the product is subject to be taxed but at zero per cent.

On the other hand, exempted goods mean thatno taxes are charged on the sale of the goods but the businesses cannot claiminput tax credits on their purchases.

This means that exempted goods are lessfavourable for businesses as they cannot recover the taxes they paid on theirinputs and more likely the burden is passed to the end consumer.

According to Mbadi, the decision to reclassify the items was attributedto reducing the government's revenue loss from tax breaks issued to specificgroups or activities.

Aside from fertilizer, other items to bereclassified to exempt status also include inputs and raw materials (locally orimported) that are supplied to manufacturers of agricultural pest control products.

Critics perceive this as the State's move totarget the goods despite a public uproar that shelved the proposed Eco Levy under the repealedFinance Bill 2024.

The Eco levy was a measure aimed at taxingimported and manufactured products that affect the environment.

These included products such as hygieneproducts, batteries, plastic packaging materials among others.

The levy aimed to reduce micro-pollution andcurb waste management.

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