MPs prepare to debate Uhuru proposal for 8pc VAT on fuel

September 17, 2018 8:52 am
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In his address to the nation last week, President Kenyatta said he sent back the Bill which proposes to suspend the 16pc VAT increase because it does not reflect the rising challenges in the country/FILE

, NAIROBI, Kenya, Sep 17 – Members of the National Assembly will this week hold a special sitting to debate President Uhuru Kenyatta’s proposal to impose 8pc VAT on fuel products instead of issuing a moratorium to suspend a 16 per cent levy.

The sittings are set for Tuesday and Thursday.

In his address to the nation last week, President Kenyatta said he sent back the Bill which proposes to suspend the 16pc VAT increase because it does not reflect the rising challenges in the country.

He said it would have negatively impacted his four-pillar development pledge of universal healthcare, food security, expanded manufacturing, and affordable housing.

The proposal, if approved by Parliament, will see super petrol drop from the current Sh127 to Sh118, while diesel will cost Sh107 from Sh115.

The VAT on fuel products came into effect on September 1, despite the amended Bill that was passed by Parliament seeking a suspension.

The implementation has since been challenged in the High Court, leading to an order suspending it which has however not been honoured by the Energy Regulatory Commission (ERC).

According to the Head of State, the new fuel tax alone cannot enable the government to meet its financial obligations, and has therefore proposed a raft of measures aimed at cutting wastage in government spending.

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