YESTERDAY President Uhuru Kenyatta delivered an encouraging keynote speech on Kenya's economy.
He rightly pointed out that the 4.6 percent growth of the last decade was too low and that only double digit growth was good enough.
He also said he had instructed the Treasury to publish regulations on VAT to clarify the confusion over the new rules.
The new VAT regime is good for the country, even if it is a tough medicine to swallow. It will substantially increase government revenue to help pay for the cost of devolution.
However VAT has also become a stick used by the opposition to bash the government, particularly on the cost of food.
Uhuru said yesterday that Jubilee was "sensitive to the vulnerable in our country" and that basic commodities like milk, flour and bread are exempt from VAT.
However apparently only unprocessed milk, infant formula and 'special bread' are exempt from VAT. Ordinary milk and bread are not exempt.
Government should not backtrack on its extension of VAT. The revenue is needed to pay for government services.
But government should consider exempting all foodstuffs from VAT. Many countries do not charge VAT on food but charge it on everything else. Kenya could do likewise.
Quote of the day: "It is by playing safe that we create a world of utmost insecurity." - UN Secretary General Dag Hammarskjöld died in a plane crash in Congo on September 19, 1961.