Treasury defends 16pc VAT on fuel as Rotich case moved

Wednesday September 12 2018

The National Treasury has defended its decision not to halt implementation of 16 percent VAT on fuel.

Chief Administrative Secretary Nelson Gaichuhie on Wednesday told a senate committee said that they have not been served with any court order.


Mr Gaichuhie told the Senate Committee on Energy that they have not disobeyed any court ruling.

"We are not ignoring or disobeying any court but until served, we can't act," Mr Gaichuhie said.

He said postponing the implementation of the act for two more years will not really solve the problem.


"We either repeal altogether because between now and 2020 nothing will change," the CAS said.

He said Treasury is alive of the cries of the public and a lot of consultation is going on.

"There are meetings between Treasury and national assembly and hope a solution will be found," he said.

But as Gaichuhie was defending himself before the committee, the High Court was issuing new orders on a contempt case facing his boss Henry Rotich and Energy Regulatory Commission Director-General Robert Pavel Oimeke.

Sitting in Kisumu, High Court judge Fred Ochieng ruled that the temporary orders stopping implementation of the tax still stands.


The conservatory orders issued in Bungoma stopped Kenya Revenue Authority and ERC from implementing the Finance (VAT) Act 2013, which was effected from September 1.

This was to enable the president to either assent to or reject the amended Finance Bill passed by the National Assembly

Judge Ochieng on Wednesday said he will not issue or overturn orders issued earlier, adding that the case filed by a Kisumu youth group will be heard alongside a similar suit filed in Nairobi.

The judge said the case against Mr Rotich and Mr Gaichuhie will be mentioned on Monday at the at the High Court in Milimani.

“The order stopping the implementation of the tax is there until it is set aside. I cannot do that (overturn) and that is why the matter is better heard in Nairobi alongside the other case,” said the judge.

He added: “The two cases are of the same subject matter. It is only prudent that they be fixed for mentioning at one place so that the issues are ventilated upon and agreed on.”

The judge said that Kenyans are in a difficult spot, same to the national government, saying there is an urgent need to address the matter.

“All Kenyans, including me, are suffering. You should also look into who created the problem,” Judge Ochieng told the lawyers.

This happened even as ERC made a fresh application seeking to overturn the orders issued by the court.

Mr Kenneth Amonde, the lawyer for the three petitioners who filed contempt case against Mr Rotich and ERC, insisted the two must heed to court orders.