Monday, May 15, 2023 – Petroleum Association of Kenya has warned Kenyans to prepare for tough times ahead if President William Ruto’s Finance Bill 2023 sees the light of day.
According to them, imposing more tax on fuel products as proposed in the Finance Bill 2023 would compel fuel to hit Sh200 from Sh176.98 for Super Petrol, according to the price review announced by Energy and Petroleum Authority (EPRA).
They, therefore, implored President William Ruto to employ the strategies President Samia Suluhu Hassan used to reduce fuel prices in Tanzania.
“Tanzania removed VAT on Petroleum Products,” the Petroleum Association of Kenya claimed.
However, a spot check indicated that Tanzania did not remove VAT but only resorted to subsidies.
The move to introduce subsidies was initiated in the Tanzanian Parliament, where the government had set aside Ksh5.8 billion to support the programme.
In 2022, President Suluhu directed her Cabinet to find an alternative to lowering fuel prices in Tanzania. The Cabinet proposed lowering the levies imposed on the product.
The proposals worked, helping Tanzanians to enjoy fuel at affordable prices.
In Kenya, President William Ruto scrapped the subsidy programme, arguing that it was not sustainable.
Ruto struck a deal with Saudi Arabia in a government-to-government arrangement to protect Kenyans from high fuel prices.
However, the Petroleum Association of Kenya indicated that Kenyans would fail to benefit from the arrangement following plans to impose a 16% tax on petroleum products.
They pleaded with the members of parliament to reject the Finance Bill 2023, which is seeking to impose a 16% value-added tax on petroleum products.
Petroleum dealers further indicated that additional tax would be detrimental to the sector owing to the dollar exchange rate affecting the industry.
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