Treasury scraps taxes on maize and wheat flour in new budget

By Obrien Kimani

The cost of maize and wheat flour is expected to drop significantly in the coming weeks after the government abolished value added tax on imported maize and wheat.

National Treasury Cabinet Secretary Henry Rotich has further waived duty on imported maize and wheat for four months as the government moves to rein on the rising cost of Kenya’s most popular food.

Maize from the east African regions attracts a 10 percent duty while imports from outside the EAC attract a 50 percent VAT.


In a budget speech that appeared to arrest the rising cost of food in the country, the CS has proposed a raft of measures aimed at cushioning the poor.

Imports of maize and wheat will attract zero taxes in for a period of four months, in a move that the CS Rotich says should lead to a significant drop in the cost of maize and wheat flour, which are some of the most common food on Kenyans food menu.

Currently the two items attract a 10 percent import duty if sourced from the East African region while the same is levied at 50 percent if imported outside the region. Kenya’s wheat production is less than one quarter of its annual demand, and the deficit is offset by imports.

The bulk of the wheat imports are from Russia, Ukraine and Australia.

The cost of maize and wheat flour has risen by 25 and 35 percent respectively in the last five months as ravaging drought continues to affect food production.

The cabinet secretary has also expanded the social safety net, which will see all senior citizens aged 70 years and above receive monthly stipend and free national health insurance cover.

The government appears to have softened it position on the interest rates capping law with the cabinet secretary inviting stakeholders in the banking industry for a meeting next month to review the impact of the law.

In a bid to eat a piece of the gambling and getting pie, the exercise which has become prevalent in the country will attract an excise duty of 50 percent.

Vehicle manufacturers have also seen import duty dropped by half from 30 to 15 percent to help the local vehicle assembling industry. Futher-more individuals earning 13,500 have been excluded from the pay as you earn bracket that only covered employees earning a maximum of 10K.

To attract investors the government has abolished capital gains taxes for companies seeking to set up base in the special economic zones.

The CS has also promised to overhaul the income and the corporate act to net more taxes.



















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