Friday, March 29, 2024

Relief as heavy tax on fuel suspended

Kenyans can now breathe a sigh of relief after MPs voted to suspend the implementation of 16 per cent VAT on petroleum products.

The amendment to the Finance Bill, 2018 moved by National Assembly Minority Whip Junet Mohammed was meant to cushion Kenyans from the high cost of living.

The levy will now take effect on September 1, 2020.

Relief as heavy tax on fuel suspended

“This House has been accused of not being sensitive to the needs of the people. It is time we side with them and I plead that we postponed this tax to 2020,” Junet Mohamed, who moved the amendment said.

This is the third time the implementation of the tax is being suspended, having been deferred twice in the last two financial years.

Nairobi motorists would have paid a record Sh131.93 per litre of petrol or about Sh18.20 more beginning September 1.
At that price, Treasury would be taking Sh57.57 from each litre of petrol sold in the city.

In 2016 it was agreed that the government would do away with tax exemptions as part of a plan to grow revenues, reduce budget deficits and slow down debt.

The tax was first introduced on petrol, diesel, kerosene and jet fuel in the VAT Act of 2013, with a three-year grace period.

It was to come into force in 2016 but was deferred to September. COTU Secretary General Francis Atwoli and motorists had protested the tax, threatening to resist implementation of the Bill.

Atwoli last week said worker would do everything to block the implementation of the tax which was to take off midnight tomorrow.

“Kenyans’ pockets have been dug deep and as workers, we will not continue keeping quiet and watch the government destroy our economy through unreasonable taxes,” said Atwoli.

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