Kenyan MPs vote to delay fuel tax

A fuel station in Nairobi. The government was planning to introduce
a 16 per cent value-added tax on petroleum products

Kenyan lawmakers Wednesday voted to delay the 16 per cent tax on petroleum products by two more years, effectively shielding poor household from a spike in the cost of living starting Saturday.

MPs said the introduction of the value-added tax on petroleum products would, at the touch of a button, cause a rally in the cost of commodities and transport.

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

Deferred twice

The amendment now means that the tax will take effect on September 1, 2020.

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

Nairobi motorists would have paid a record Ksh131.93 ($1.3) per litre of petrol or about Ksh18.20 ($0.2) more beginning September 1.

Development fund

At that price, Treasury would be taking Ksh57.57 ($0.6) from each litre of petrol sold in the city.

At the same time, MPs have shot down Treasury’s proposal to create a National Housing Development Fund, that would have seen employers and employees contribute 0.5 per cent of their pay.

The lawmakers rejected attempts to have Kenyans in formal employment contribute 0.5 per cent of their pay to the housing development fund as indicated in the Finance Bill 2018.

-The EastAfrican