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President Uhuru offers 8 per cent VAT, asks Kenyans to brave pain of new Constitution

President Uhuru offers 8 per cent VAT, asks Kenyans to brave pain of new Constitution

President Uhuru Kenyatta address from State House, Nairobi. [Standard] In an admission of the tough times ahead, President Uhuru Kenyatta proposed to cut by a half the 16 per cent VAT imposed on petroleum products, then announced a raft of austerity measures expected to save the government Sh52.6 billion this financial year.

Addressing an expectant nation, the President signified his resolve to deal with wastage in government by proposing to allocate more resources to institutions in the frontline in the war against corruption, chiefly the Judiciary and the investigative and prosecutorial agencies.

ALSO READ: Showdown looms as MPs vow to veto Uhuru’s decision on tax

The price of super petrol will drop to Sh118 from Sh127.8 per litre in Nairobi, while that of diesel will drop to Sh107 from Sh115, if MPs accept the President’s proposal contained in a memorandum to Parliament when he returned the Finance Bill 2018 on Thursday for re-consideration.

He said the Finance Bill 2018 fell short of acceptable threshold as it only protected the status quo and sacrificed the bigger vision.

Easy path

“It took the easy path, instead of rising to the challenges of our time. It was good politics, but bad leadership,” he said.

Kerosene, largely used by the poor for lighting and cooking, will go down to Sh90.89 from Sh97.41.

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MPs, however, have the option of turning down the President and pass the Finance Bill 2018 in the form they passed it on August 30, but which would require two thirds of the MPs to pass.

Coming in the wake of two weeks’ outcry over the increasing debt burden, the announcement — by a Government intent on retaining the taxation to bridge financing gaps in this year’s budget — met mixed reception by long suffering Kenyans, who expected the President to completely do away with the new revenue measures.The President’s bid was meant to soften the blow, but there were fears yesterday that the cost of living could only get worse in days to come as more businesses factor in their products the high fuel charges on realisation that the VAT on fuel is not going away. ALSO READ: Uhuru: We must balance short-term suffering and long-term gain Uhuru was optimistic that Parliament will accept his proposals, and urged all business owners to lower their prices […]

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