NAIROBI, Kenya
Kenyans have started feeling the effects of the Value Added Tax Act 2013, which subjects items that were previously zero-rated or exempt to a 16% standard levy. The VAT Bill was signed into law by the President last month and became effective on September 2.
Among the worst hit is the publishing industry which includes books and stationery. Already, the two main leading national newspapers, Daily Nation and The Standard, have announced a 20% increase inthe cover price, from Ksh.50 to Ksh.60 starting tomorrow.
Announcing the price review, the Standard Group CEO Sam Shollei pledged the company’s continued commitment to exemplary newspaper quality to deliver value for money for the rapidly growing readership. The Nation Media Group also announced an upward revision in the cover price of its newspapers. The Daily Nation, The Sunday Nation, The Saturday Nation and The Business Daily will all retail at Ksh.60 up from Ksh.50.
Also affected by the price increase is TheEast African, which will retail at Ksh.100 and SportOn will cost Ksh.40 up from Ksh.30.The new price for Taifa Leo will be Ksh.30. This move is likely to hurt newspaper readership at a time when the internet is threatening printed news.
The Act has also is expected to lead to a general rise in the cost of consumer goods including processed milk, cooking gas, electricity, exercise and text books, mobile phones, animal feeds and the film industry as well. For instance, a half litre packet of fresh milk that now retails at Ksh.45 is set to rise to between Ksh.52 and Ksh.56.
Treasury expects to collect close to Ksh10 billion more in the current fiscal year from the new VAT measures to bridge the country’s budget deficit. The new law comes into force as the cost of living for last month rose for the third month running, as inflation rose to 6.7%.
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