Nairobi — Deputy President William Ruto has joined the Kenya Revenue Authority (KRA) in cautioning traders against using the recently adopted Value Added Tax (VAT) Bill, 2013 as an excuse to overcharge Kenyans.
He said the 16 percent tax has been added only to a limited number of previously tax exempt goods and Kenyans should not be taken advantage of because of it.
"We want to be very straight forward. Businessmen who have engaged in the business of raising prices on the pretext of VAT must watch out," he said.
Ruto went on to explain that the government was not looking to place an unnecessary tax burden on Kenyans through the Act, but was looking for a way to finance the nation's development agenda.
"We want money to build Kenya. Money to construct roads, to build the rail system, to stock public hospitals with medication, that is what we are after," he said.
He said the Jubilee government's goal is to make Kenya self-reliant and free Kenyans from the chains of a dependence on donors.
"We are very proud as Kenyans that we can manage, we can raise our own resources to fire our own development... We do not want to be a begging nation. We want to be a nation that can manage its own affairs," Ruto declared.
The KRA has itself come out fighting against the negative publicity the adoption of the VAT Bill, 2013 has elicited and warned traders who charge VAT on tax exempt goods that they risk legal action.
"It is evident that a number of traders are using amendment to the VAT Act to increase prices by collecting the tax on exempt goods and services. This is illegal and punishable by law," the KRA Senior Deputy Commissioner for Marketing and Communication cautioned in a statement.
The KRA clarified that the following items remain tax-exempt: fertilisers, maize flour, medicines, pharmaceutical products, wheat flour, sanitary towels, ordinary bread, gasoline regular, gasoline premium and kerosene.
As of September 2, the prices of milk, newspapers, mobile phone handsets and even electricity went up in implementation of the VAT Act 2013 to a wide-spread outcry by Kenyans that traders were taking advantage of the new law to enrich themselves.