President Uhuru crushes Kenyans hopes and rejects suspension of 16% VAT on fuel

The President’s rejection of the Bill now puts to rest the ongoing stalemate over the 16 per cent VAT on fuel.

  • On Thursday evening, President Kenyatta rejected the Finance Bill 2018, effectively condemning Kenyans to buy fuel at a steep price of upwards of Sh130.
  • Since 1st September when the 16 per cent levy on petroleum product came into effect, there has been a countrywide uproar, with public transport players hitting passengers with a 40 per cent raise on fares.

On Thursday evening, President Kenyatta rejected the Finance Bill 2018, effectively condemning Kenyans to buy fuel at a steep price of upwards of Sh130.

Earlier on, Minority Leader John Mbadi had accused National Assembly Speaker Justin Muturi of deliberately sitting on the Bill.

“It is unfortunate that despite Parliament approving the Finance Bill, 2018, exactly two weeks ago today, the same has not been forwarded to the President for assent,” he said.

Uhuru’s move comes even as Treasury Secretary gave a strong signal that the unpopular 16 per cent VAT on petroleum products might be dropped.

While speaking to reporters in Nairobi on Thursday, Henry Rotich said the 16 per cent VAT will be reviewed “shortly” and his ministry was in final stage of striking a deal with the National Assembly following discussions which started last week.

“We are looking at options of reviewing it and that discussion is at final stages. I can’t give you any direction at the moment,” Said Mr Rotich.

Since 1st September when the 16 per cent levy on petroleum product came into effect, there has been a countrywide uproar, with public transport players hitting passengers with a 40 per cent raise on fares.

The 16 per cent Value Added Tax on petroleum products was seen as a litmus test for President Uhuru Kenyatta’s administration, with the government walking a tightrope between keeping its commitments to international donors and caving into the public interest.

Had Uhuru assented the bill, Kenya would have been at risk of an economic meltdown.

IMF would have locked out Kenya precautionary credit and then be at liberty to recall their outstanding principals with could immediately trigger an economic meltdown in the country.

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