Nairobi, KENYA: President Uhuru Kenyatta has proposed a reduction in VAT on petroleum products from 16% to 8%.
In his state of the Nation address on Friday, President Kenyatta said this action is based on complaints from the public.
“It is clear that you are all troubled by the effects of the rise in the prices of petroleum products and its impact on the cost of living, I have heard and understand your concern which is why I have proposed as part of my memorandum to cut VAT on petroleum products by 50%,” said the president.
It now remains to be seen if parliament approves this proposal and amends them into the Finance Bill 2018.
If this happens, a reduction in the price of fuel is expected with the price of petrol dropping from sh.127 per litre to about sh.118 and that of diesel from sh.115 to sh.107.
The president in a challenge to all businessmen, asked them to reduce prices on products they had hiked when the VAT was implemented on the 1st of September.
The president also said that the government would also impose a wide range cuts on spending by reducing the expenditure on hospitality, foreign and domestic travel, seminars and training and assured Kenyans that their tax would be spent well.
The president also increased funding to judiciary.