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Struggling Posta eyes VAT exemption boost

Posta has been on a drive to market its services to the public in a bid to shore up its revenue. It has been in financial doldrums having posted a Sh1.5 billion loss in the year ended June 2017.

Staff sort out mail at the Nyeri Post Office. FILE PHOTO | NMG

Postal Corporation of Kenya could get a financial shot in the arm with a proposed exemption from value added tax (VAT) for stamps and rental post boxes. The Finance Bill 2018/19 has proposed exempting postal services including any subsidiary services that it is currently offering to the public.Posta has been on a drive to market its services to the public in a bid to shore up its revenue. It has been in financial doldrums having posted a Sh1.5 billion loss in the year ended June 2017.It got out of the public transport sector towards the end of last year, terming it risky and unsustainable.

“The First Schedule to the Value Added Tax Act, 2013 is amended in Part II [for exempt supplies] by adding the following new paragraph … Postal services provided through the supply of postage stamps, including rental of post boxes or mail bags and any subsidiary services thereto,” says the Bill.Besides the VAT exemption, it is also banking on selling rentals for its post boxes that it has been holding without customers for a long time. It recently advertised the boxes with untaken ones numbering 70,000 as at September last year.

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