Kenyan Government Proposes Higher Taxes on Essentials

The Kenyan government is proposing higher taxes on essential commodities like maize flour, bread, and milk, which could lead to increased consumer prices. Treasury Cabinet Secretary John Mbadi announced on October 16 that these goods may shift from being VAT zero-rated to tax exempt. While zero-rated items can claim VAT refunds on input costs, exempt goods do not qualify for such refunds, resulting in higher production costs that are likely to be passed on to consumers. The changes are part of a broader review of the VAT Act to close tax loopholes.