MP seeks to delay tax plan on fuel - Daily Nation

Minority Whip Junet Mohamed seeks to delay tax plan on fuel

Wednesday August 29 2018

fuel tax

The plan by Treasury to introduce 16 per cent tax on petroleum products could be delayed for two years if MPs agree with a proposal by the Minority Whip Junet Mohamed. FILE PHOTO | NATION MEDIA GROUP 

More by this Author

The plan to introduce 16 per cent tax on petroleum products could be delayed for two more years if members of the National Assembly agree with a proposal by the Minority Whip Junet Mohamed.

Mr Mohamed has filed an amendment to the Finance Bill, 2018, which is already before the House, seeking the concurrence of the House to suspend the implementation of the Value Added Tax (VAT) until 2020 to cushion Kenyans from the high cost of living.

He told the Nation on Tuesday that the VAT portends tough times for low income earners and wants its implementation suspended.

The government has twice deferred the implementation of the 16 per cent VAT in the last two financial years following public outcry.


“Kenyans are going through tough times and it is only fair that we suspend the implementation of this VAT,” he said.

At prevailing prices, diesel used to power commercial vehicles such as buses and tractors, will cost Sh119.77 a litre while petrol will go up to Sh130 per litre after adding the tax.

In his amendment, Mr Mohamed seeks to change the date of the implementation to September 1, 2020.

The introduction of the VAT in petroleum products was contained in the budget speech delivered by Treasury Cabinet Secretary Henry Rotich last June.

However the Central Organisation of Trade Union (Cotu) has threatened to call for a national strike if the government implements the proposal which is set to take effect on Saturday September 1.


Whereas secretary-general, Mr Francis Atwoli said workers will reject poor policies from the government, which he alleged to have destroyed the economy and left workers poor, the Matatu Owners Association have vowed to hike fares by 30 per cent should the proposal be implemented.

“If not we shall call for a national strike of all our members and the country will come to a standstill. We will also ensure every citizen takes part in the protest to remind Rotich that he is there to serve workers,” Atwoli said.


The bill went through the second reading on Monday and the House will consider amendments when it goes to the committee stage Wednesday.

VAT was first introduced on petrol, diesel, kerosene and jet fuel in the VAT Act of 2013, with a three-year grace period that would have seen it come into force in 2016 when it was once again deferred to September 2018.

However Kenyans have hit out at the proposal arguing excise duties on the basic items will go up at a time they are already struggling to survive.