This archive report was first published on 12 June 2020.
The Kenyan government has announced a 14% value-added tax on liquefied petroleum gas, set to take effect on July 1, 2020, as per the Finance Bill 2020.
This decision has sparked concerns about the government's commitment to easing the cost of living, particularly during a time of economic slowdown.
According to the National Treasury, the tax will be applied to all businesses, regardless of their profit or loss, at a rate of 1% of their revenues.
As a result, the price of a 6-kilogram cooking gas cylinder, which currently retails between Sh. 750 and Sh. 1,000, is expected to increase to between Sh. 1,050 and Sh. 1,300.
Speaking on the matter, National Treasury Cabinet Secretary Ukur Yatani stated, 'Whereas these tax incentives are well intended, they have limited the capacity of government to fund critical expenditures. In addition, a critical review of the incentives shows that consumers have not benefited through a commensurate reduction in the cost of goods and services.'
