Increase in fuel prices means a ripple effect across all sectors of the economy, including building and construction. PHOTO| FOTOSEARCH The 16 per cent value added tax (VAT) on petroleum products is bound to greatly affect Kenyans, who, experts say, are already heavily burdened with taxes.
According to a cement dealer and paint dealer who works closely with Crown Paints, the price of a bag of cement will go up by from Sh580 to Sh610.
Mr Francis Kihanya, CEO of Manyatta Capital says that transport is a key factor in construction, accounting for about 30 to 40 per cent of the overall cost.
A storm is brewing in the country over the implementation of the new fuel levy by the National Treasury.
On the one hand, the Treasury and the Kenya Revenue Authority stand firm by their decision to collect Sh70 billion through the 16 per cent value added tax (VAT) on petroleum products, ignoring the public mood, which parliament, one the other end, seemed to have read quite well last Wednesday when MPs voted to postpone its implementation for another two years.
There is no telling what will happen in the coming days as Treasury Cabinet Secretary Henry Rotich, who could have exercised his powers to suspend the introduction of the new tax pending the President’s assent of the Finance Bill, 2018, seems unlikely to budge.
But what is certain is that the tax is bound to greatly affect Kenyans, who, experts say, are already heavily burdened with taxes.
The increase in fuel prices means a ripple effect across all sectors of the economy, including agriculture, manufacturing, transport, tourism, building and construction, energy and healthcare.
Consequently, ordinary Kenyans are staring at tough times ahead, with the prices of food, transport, electricity, healthcare, and housing, among others, expected to go up.
But just what does this new tax portend for the property industry? We sought real estate players’ views on the matter, given the government’s spirited campaign to make housing affordable under its “Big Four” agenda.
CONSTRUCTION MATERIALS Speaking at his office in Industrial Area, Crown Paints Kenya Group CEO Mr Rakesh Rao told DN2 that the immediate impact will be the loss of cash flow for one month.“We use a lot of oil solvents to manufacture our oil-based paints — actually more than 200 metric tonnes every month. Therefore, if the supplier introduces the 16 per cent VAT, it means we will have […]
