@TheStar

State weighing options on 16 per cent fuel tax

2 months ago, 13 Sep 00:05

By: Victor Amadala @i ...

The government could slash the development budget as an option to the 16 pecent Value Added Tax on fuel that has sparked public outrage.

National Treasury chief administrative secretary Nelson Gaichuhie said this yesterday when he defended the tax before the Senate Committee on Energy.

‘’The government acknowledges the toll the new tax has on Kenyans. Even so, it has an obligation to collect Sh35 billion from the tax every month to seal a budget deficit. We are exploring other alternatives including slashing development budget,’’ he said.

He however cautioned that such a measure will dent the country’s fiscal plan, adding that National Treasury is open to more options.

‘’We are in consultation with Parliament and other relevant stakeholders to find a better alternative. Treasury CS Henry Rotich and other leaders are holed at State House to solve this quagmire,’’ Gaichuhie said.

If Kenya settles on cutting development budget as an alternative to VAT on fuel, it means this year’s development budget of Sh625.1 billion which is only 24 per cent of GDP will drop even way lower than IMF’s target of 30 per cent of GDP.

Kenya promised IMF to adhere to the fiscal responsibility principle which requires 30:70 ratios of development and recurrent expenditures respectively as a condition to extending the Sh150 billion precautionary facility that expires on Friday.

Cutting down on development budget will also halt planned infrastructure development projects for the year including construction of hospitals, roads, schools and other social economic activities.

Narok Senator Ledama Ole Kina asked Treasury to consider raising tax on alcohol, cigarettes and other luxury products.

‘’Why can’t you consider raising tax for cigarettes and alcohol which are unhealthy instead of tormenting Kenyans with high fuel prices that has led to high cost of living? Kenyans can do without cigarettes,’’ Ole Kina said.

Petroleum products continue to attract 16 per cent that came into effect on September 1 despite court temporality suspending the order.

Both Gaichuhie and Energy Regulatory Commission director general Pavel Oimeke told the Ephraim Maina led committee that they were yet to be served the order.

On Thursday last week, High Court in Bungoma issued temporary orders stopping the implementation of VAT on petroleum products.


Read More


Category: topnews news business

Suggested

3 hours ago, 00:14
@StandardMedia - By: Xn Iraki
Science versus humanities: What if Ruto was right?

A couple of weeks ago, Deputy President William Ruto was on the receiving end of columnists and commentators in leading dailies. His sin was declaring ...

Category: topnews news
3 hours ago, 00:14
@StandardMedia - By: Sunday Standard Te ...
Ruaraka: Senators to decide Matiang’i fate

But MPs want matter reverted to the National Assembly and accuse Senators of soliciting for bribes. ...

Category: topnews news
3 hours ago, 00:14
@StandardMedia - By: Munene Kamau
Mungiki, rival gang killings spark fresh fear in villages

The vigilante group hunts down remnants of the sect members, hacks them to death and has banned their funeral ceremonies. ...

Category: topnews news
3 hours ago, 00:14
@StandardMedia - By: Moses Omusolo
Kenyan start-up wins Sh15.5m award for app to fight fall armyworm

A Nairobi-based start-up has won $150,000 (Sh15 million) for coming up with an application that seeks to tackle the problem of fall armyworm in Kenya. ...

Category: topnews news
3 hours ago, 00:14
@StandardMedia - By: Vivianne Wandera
Revealed: How students mint cash in sneaky abortion trade

Well connected undergraduates using their hostels and rooms outside campus as observation wards for their clients. ...

Category: topnews news
3 hours ago, 00:14
@StandardMedia - By: Amos Kareithi
Inside rich water well that cooled slaves’ throats

The well, situated under the Bohra Mosque, has a rich and complex history connecting it with the abolition of slave trade in 1820s. ...

Category: topnews news

@TheStar

State weighing options on 16 per cent fuel tax

2 months ago, 13 Sep 00:05

By: Victor Amadala @i ...

The government could slash the development budget as an option to the 16 pecent Value Added Tax on fuel that has sparked public outrage.

National Treasury chief administrative secretary Nelson Gaichuhie said this yesterday when he defended the tax before the Senate Committee on Energy.

‘’The government acknowledges the toll the new tax has on Kenyans. Even so, it has an obligation to collect Sh35 billion from the tax every month to seal a budget deficit. We are exploring other alternatives including slashing development budget,’’ he said.

He however cautioned that such a measure will dent the country’s fiscal plan, adding that National Treasury is open to more options.

‘’We are in consultation with Parliament and other relevant stakeholders to find a better alternative. Treasury CS Henry Rotich and other leaders are holed at State House to solve this quagmire,’’ Gaichuhie said.

If Kenya settles on cutting development budget as an alternative to VAT on fuel, it means this year’s development budget of Sh625.1 billion which is only 24 per cent of GDP will drop even way lower than IMF’s target of 30 per cent of GDP.

Kenya promised IMF to adhere to the fiscal responsibility principle which requires 30:70 ratios of development and recurrent expenditures respectively as a condition to extending the Sh150 billion precautionary facility that expires on Friday.

Cutting down on development budget will also halt planned infrastructure development projects for the year including construction of hospitals, roads, schools and other social economic activities.

Narok Senator Ledama Ole Kina asked Treasury to consider raising tax on alcohol, cigarettes and other luxury products.

‘’Why can’t you consider raising tax for cigarettes and alcohol which are unhealthy instead of tormenting Kenyans with high fuel prices that has led to high cost of living? Kenyans can do without cigarettes,’’ Ole Kina said.

Petroleum products continue to attract 16 per cent that came into effect on September 1 despite court temporality suspending the order.

Both Gaichuhie and Energy Regulatory Commission director general Pavel Oimeke told the Ephraim Maina led committee that they were yet to be served the order.

On Thursday last week, High Court in Bungoma issued temporary orders stopping the implementation of VAT on petroleum products.


Read More

Category: topnews news business

Suggested

3 hours ago, 00:14
@StandardMedia - By: Xn Iraki
Science versus humanities: What if Ruto was right?

A couple of weeks ago, Deputy President William Ruto was on the receiving end of columnists and commentators in leading dailies. His sin was declaring ...

Category: topnews news
3 hours ago, 00:14
@StandardMedia - By: Sunday Standard Te ...
Ruaraka: Senators to decide Matiang’i fate

But MPs want matter reverted to the National Assembly and accuse Senators of soliciting for bribes. ...

Category: topnews news
3 hours ago, 00:14
@StandardMedia - By: Munene Kamau
Mungiki, rival gang killings spark fresh fear in villages

The vigilante group hunts down remnants of the sect members, hacks them to death and has banned their funeral ceremonies. ...

Category: topnews news
3 hours ago, 00:14
@StandardMedia - By: Moses Omusolo
Kenyan start-up wins Sh15.5m award for app to fight fall armyworm

A Nairobi-based start-up has won $150,000 (Sh15 million) for coming up with an application that seeks to tackle the problem of fall armyworm in Kenya. ...

Category: topnews news
3 hours ago, 00:14
@StandardMedia - By: Vivianne Wandera
Revealed: How students mint cash in sneaky abortion trade

Well connected undergraduates using their hostels and rooms outside campus as observation wards for their clients. ...

Category: topnews news
3 hours ago, 00:14
@StandardMedia - By: Amos Kareithi
Inside rich water well that cooled slaves’ throats

The well, situated under the Bohra Mosque, has a rich and complex history connecting it with the abolition of slave trade in 1820s. ...

Category: topnews news
Our App