Treasury secretary Henry Rotich. The chaotic management of the economy under the Jubilee administration is set to sink to new low if a 16 per cent Valued Added Tax (VAT) on petroleum products is introduced now or in 2020. FILE PHOTO | NMG Experts say new fuel prices will push Kenyans at the bottom of the pyramid who are already at the periphery to the brink.
The cost of living is already too high and it is the worst mistake to introduce VAT on fuel which touches on all aspects of life.
Transporters have warned that an increase in fuel prices will automatically increase the cost of public transport as well as the movement of goods.
The chaotic management of the economy under the Jubilee administration is set to sink to new low if a 16 per cent Valued Added Tax (VAT) on petroleum products is introduced now or in 2020.
After plunging the country into an unprecedented deep hole of debt amid widening fiscal deficits, the government moved to further tax fuel products in a bid to raise Sh71 billion annually. The National Treasury had not contended with the public mood which Parliament read well in throwing out the proposal which could still be implemented by default if President Uhuru Kenyatta does not assent to the changes.
The measure, which is being pushed by the International Monetary Fund (IMF) so that Kenya can keep a Sh150 billion precautionary facility, is threatening to ignite an inferno capable of crippling the economy. However, the Central Bank of Kenya (CBK) has said that the country no longer needs this facility.
With majority of Kenyans struggling to make ends meet due to high costs of living, a fuel price increase would condemn many households to a life of penury, higher transport costs and general increase in the prices of basic goods and services.
“The macroeconomics of this government have failed. The cost of living is already too high and it is the worst mistake to introduce VAT on fuel which touches on all aspects of life,” said Mr Stephen Mutoro, Secretary-General of the Consumer Federation of Kenya.
Despite inquiries by The Saturday Nation, the National Treasury opted to remain mum with principal secretary Kamau Thugge failing to return calls and respond to SMSs.
CONDEMNATION The Energy Regulatory Commission (ERC), which would adjust fuel prices taking into account the new tax, has said […]