Kenyan parliament suspends implementation of 16% vat on fuel for 2 years

The government was set to introduce a 16 per cent VAT on petroleum products

The amendment, filed by Minority Whip Junet Mohamed through the Finance Bill, 2018, will see the implementation of the new tax suspended to 2020.

MPs said the introduction of the value-added tax on petroleum products would have triggered a rise in the cost of goods and transport.

The 16% tax was set to take effect on September 1, in line with Kenya’s promise to the International Monetary Fund (IMF) two years ago.

In the new plan, petrol prices were set to shoot to Sh131.93 in Nairobi, while diesel and kerosene would have risen from the current Sh102.74, and Sh84.95 per litre, to highs of Sh119.38, and Sh98.54, respectively.

The government has twice deferred the implementation of the 16 per cent VAT in the past two financial years, for fear of public backlash.

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