Kenya to Double VAT on Fuel

Kenya to Double VAT on Fuel

Kenya’s government has hinted about a plan to double the value-added tax on fuel to 16%, the country’s finance minister, Njuguna Ndung’u, said. Petroleum products have received preferential tax treatment, gradually transitioning from exempt status in 2013-18 to 8% from 2019, Mr. Ndung’u told parliament when presenting the 2023-24 budget estimates.

“The continued practice by the government to subsidize the cost of fuel by levying a preferential rate of 8% distorts the market, yet the economy should be operating on the principles of demand and supply,” he said.

At least a dozen legislators from the opposition party staged a walk-out before the presentation, claiming that a raft of taxes proposed in the budget, particularly the fuel tax, were punitive to ordinary Kenyans already enduring high costs of living.

Kenya relies heavily on petroleum product imports to meet its energy demands.

The country’s oil production, which was expected to start last year with an output of up to 100,000 barrels a day from oil fields in the northern part of the country, has been delayed as Tullow Oil and partners are still negotiating with a potential new partner, Tullow said in November. #Kenya to Double VAT on Fuel

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