In his state of the nation address today, President Kenyatta has proposed to slash the 16 per cent VAT on petroleum products by 50 per cent to 8 per cent citing the need to relieve Kenyans from the high cost of living the tax has imposed.
“I have heard and understand your concerns; which is why I have proposed as part of my memorandum to cut VAT on petroleum products by 50 per cent from 16 per cent to 8 per cent. Should Parliament accept this proposal, the price of super petrol will drop from Sh127 to about Sh118 and the price of diesel will drop from Sh115 to Sh107,” he said.
President Uhuru Kenyatta proposes reduction of Fuel levy by 50% from 16% to 8% pic.twitter.com/UOpIw1FWGQ
— Kenyan Wallstreet (@kenyanwalstreet) September 14, 2018
However, the President acknowledged that the cut will affect the budget deficits which is why he has cut down on government spending in the less essential areas of hospitality, foreign and domestic travels training, and seminars.
“This ensures that the sacrifices made by taxpayers are matched by discipline from public servants,” he stated.
The President highlighted that the fuel levy is important because “We have to pay for the new constitutional order as well as public services on which Kenyans depend,” he asserted. […] “Further delay would compromise our ability to deliver basic services to Kenyans and maintain our development trajectory.”
In his speech, President Kenyatta also proposed to increase funding to the Judiciary and the Directorate of Public Prosecution so that they can speed up the process of handling cases on corruption and economic crimes.
Kenyans are now waiting for Parliament’s next move in the special sittings to be held next week.
“According to the constitution, legislators may accommodate the President’s concerns following which the Bill would be resubmitted to the President for assent. However, Parliament may pass the Bill a second time without amendments by a vote supported by two-thirds of the members of the National Assembly,” Apex Africa said in a statement.
The IMF Stand-By Facility
The IMF’s precautionary stand-by facility has expired on Friday and the Treasury has chosen not to renew it but will continue to engage the IMF. This decision does not affect the country in the immediate future, Apex Africa said. This stand has also been supported by the IMF representative Jan Mikkelsen who told Reuters:
IMF says Kenya can manage despite expiry of the SBA program pic.twitter.com/q8nETYET35
— Kenyanwallstreet (@kenyanwalstreet) September 14, 2018