The Government of Kenya is planning to increase the tax on fuel by 8 per cent, local media reported on Tuesday.
President William Ruto’s administration is keen on raising the Value Added Tax (VAT) on petroleum products from the current 8 per cent to 16 per cent in efforts to raise more revenue.
Ruto has reportedly directed the ruling party’s leadership in Parliament to introduce the amendment that would see the already high fuel prices increase further.
Operators in the transport and manufacturing sectors have warned that this move would push up the cost of goods and services for many Kenyans.
Kenya’s Daily Nation newspaper reports that the new levy, if approved by Members of Parliament, will take effect on July 1.
Ruto’s predecessor, Uhuru Kenyatta, had in 2018 unsuccessfully attempted to impose a 16 per cent VAT on petroleum products.
In September that year, Parliament voted to delay the implementation of the 16 per cent levy by two years.
Increase to the tax had previously been postponed several times, with MPs citing high cost of living.
Currently, a litre of petrol in Kenya’s capital Nairobi retails at Ksh179.30 ($1.31), diesel (Ksh162; $1.19) and kerosene (Ksh145.94; $1.07).
Should the proposed increment sail through, then the prices of fuel commodities in Kenya could rise significantly.
