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The National Assembly (NA) on Wednesday, June 21, voted to increase the Value Added Tax (VAT) for fuel from 8 per cent to 16% causing a countrywide uproar.
In an interview with Citizen TV, Molo MP Kimani Kuria, who chaired the Finance Committee that drafted the Finance Bill Report, revealed that President William Ruto’s government made the radical change largely to an international commitment he made.
The lawmaker explained that the Head of State had made an international commitment to cut fossil fuel usage which necessitated the rise in taxes.
“There is a global discussion about climate change and going green. Many countries across the world are moving away from consumption of fossil fuel to consumption of clean energy,” he explained the rationale behind the fuel VAT spike.
He added that the Finance Committee, in lieu of that commitment, decided to look at alternatives of fossil fuel.
Kimani highlighted that the Finance Bill zero rated bio ethanol fuel and Liquefied Petroleum Gas (LPG) so that many Kenyans can move towards clean energy.
Explaining the advantages of bioethanol fuel, Kimani noted that the Finance Bill policies governing the clean energy initiatives made it possible for Kenyans to cook a meal of four using fuel worth Ksh10 only.
“In terms of using fuel for vehicular movement, most people are buying hybrid cars. We did provide tax incentives for manufacturing of electric cars,” he clarified.
Nominated MP John Mbadi, who was part of the panel, sharply disagreed with Kimani’s explanation noting that the fuel tax surge was disadvantageous to Kenyans.
He noted that it was not possible to make international commitments and decide to move away from fossil fuel overnight.
“This has defeated even the most developed countries. Also, you cannot make life expensive and difficult for Kenyans so that you can fulfill some obligations or treaties you signed somewhere,” he vented.
Mbadi added that Kenyans were not even subjected to public participation during the signing of the treaties.
Kenyans are fearful that in July, the price of a litre of petrol is likely to hit the dreaded Ksh200 mark making the overall cost of household items (and life) more expensive.
