Kenyan MPs yesterday stated that they will introduce amendments to the Taxes and Levies (Amendment) Bill once it is tabled in the House to have Value Added Tax on fuel and Liquefied Petroleum Gas removed.
The Finance and Planning Committee of the National Assembly is expected to table the bill to reduce the price of petrol, diesel and kerosine. The MPs also hope to slash the levy that motorists pay to support fuel subsidy scheme from Ksh. 5.40 per liter to Ksh. 2.90.
The MPs said that reducing the taxes by half as currently proposed will be helpful to Kenyans as the total cost of taxes would still be above 50 percent.
John Waluke (Sirisia), Aden Duale (Garissa Township) and Ndindi Nyoro (Kiharu) stated that zero-rating of VAT on fuel and gas would go a long way in saving Kenyans from exploitation.
Contrary to those demands, Chris Wamalwa, John Mbadi, Martin Mule and David Gikaria said that the country cannot do away with taxes completely.
The Committee which is chaired by Gladys Wanga (Woman Rep for Homa Bay) recommended the reduction of VAT on fiel from 8 percent to 4 percent and LPG from 16 percent to 8 percent.
The committee proposed that the gross margin for oil marketers be reduced from Ksh. 12 to Ksh. 9 per litre.
“When the time comes, I will be moving amendments to the Bill on VAT on fuel and VAT on LPG to have it zero-rated while on the profit margins of oil marketers I recommend it to come down to 6 per cent,” said Kimani Ichung’waa.
Zero rate fuel
Aden Duale informed Members of Parliament that Kenya must zero rate fuel and gas just like Uganda, Tanzania and Rwanda. He said that all taxes and levies should not exceed 30 percent of the total cost.
“We do not need to do cosmetic amendments. As a House, we expect be bold enough and zero rate VAT.
Ndindi Nyoro (MP Kiharu) accused the Energy and Petroleum Regulatory Authority (EPRA) of playing to the gallery by reducing and increasing fuel prices arbitrarily.
But John Mbadi (Minority Whip) opposed the calls for zero-rating of fuel and LPG saying the country still needs taxes to work properly.
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