BY WINNI KENDI MUTURI
The finance bill currently tabled at the national assembly will see Kenyans pay more for fuel should it be approved.
The bill seeks to reverse a decision made in 2018, where VAT on fuel was reduced to 8 percent to give a reprieve to Kenyans.
Petroleum is one of the most charged products in the country, with a sum of 9 levies inclusive of a petroleum development levy, petroleum regulatory levy, road maintenance levy, excise levy, railway development levy rate, anti-adulteration levy, contested VAT and merchant shipping levy.
Should the 2023 finance bill get approved by the parliament, fuel prices are likely to go up by Ksh. 10.
Senior tax manager Fred Kimotho mentioned that one of the reasons the government is moving to pull out the 8% could be to unite the VAT act with double clusters. The 0 rates and 16%. He continued to say that the only commodity charged at 8% is fuel.
Based on the current fuel prices, the price of fuel might go up at least 13% a liter. This is by amending the clause that seeks to unite the VAT act which would double the price to 16 percent.
The proposal will seriously hike the cost of fuel which is a fundamental commodity in the county’s economy. This may cause dissemination in the production cost and consumer products.
The current move from the government seems unproductive as it negates efforts that they made to smoothen the importation of fuel from the United Arab Emirates backing a deal with the Middle east government.
Kenya delayed paying for oil imports for six months to reduce the pressure on the demand for dollars. Kenya hoped that the deal made would lower the cost of fuel.