Kenyan parliament vote to suspend 16% VAT on fuel

Share this Story:

Parliament on Wednesday afternoon elected to suspend by two more years the introduction of 16% tax on petroleum products that was to come into effect on Saturday September 1, 2018.

Parliament passed the Value Added Tax in 2013, introducing tax on fuel products. Its implementation was, however, given a three-year grace period to September 2016. The government further extended the period by two years to September this year after Treasury raised the Road Maintenance Levy on each litre of petrol and diesel to Sh18 from Sh6 in 2016.
Early in March 2018, the National Treasury had defended the plan to introduce 16 per cent tax on petroleum products from September 1 to collect about Sh34 billion revenue annually.

Treasury Chief Administrative Secretaries (CAS) Nelson Gaichuhie told the Senate’s Energy Committee the government will implement the law in taxing petroleum products but the resultant effect will be an extra cost. However, the International Monetary Fund (IMF) has been pressing Kenya to revoke the tax exemption on all petroleum products for the country to raise more revenue to address the budget deficit and reduce the national debt.

The parliament’s move effectively protected poor household from a projection in the cost of living.
The motion spear header, Minority Whip Junet Mohammed argued that the introduction of VAT on petroleum products would trigger immense rise in the cost of commodities, transport and general costs of living.

“This House has been accused of not being sensitive to the need of the people. It is time we side with them and I plead that we postpone this tax to 2020,” Junet said on the floor of the House.
After the suspension of the bill, the National Assembly in its official Twitter account posted:

More on This

10,404 total views, 3 views today

Leave a Reply

Your e-mail address will not be published. Required fields are marked *