Uhuru proposes to halve VAT down to 16 percent

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President Uhuru Kenyatta

THE EAST AFRICAN – President Uhuru Kenyatta has proposed to cut by half the unpopular fuel tax following concerns and protests by Kenyans.

The President, during a State of the Nation address on Friday, said he recommended an eight per cent VAT on petroleum products, down from 16 per cent.

He said had listened to Kenyans’ concerns over rising fuel prices and the impact on the cost of living.

“Should Parliament accept this proposal, the price of super petrol will drop from Ksh127 ($1.27) to about Ksh118 ($1.18), and the price of diesel will drop from Ksh115 ($1.15) to about Ksh107 ($1.07),” he said, adding that “just as business owners took the new VAT rate as an opportunity to increase the cost of goods and services, I expect them not to take advantage of weary citizens, and to lower their prices commensurately and without delay.”

The controversial levy came to effect on September 1 despite Parliament’s bid to delay its implementation by two years.

The Finance Bill 2018 was sent to the President to sign it into law, but he declined.

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