This archive report was first published on 29 June 2021.
Kenya's LPG growth target of 18 million units by 2030 is under threat due to the proposed introduction of a 16% value-added tax (VAT) on liquefied petroleum gas (LPG), according to the Petroleum Institute of East Africa.
The institute, which represents the interests of the LPG industry, has warned that the tax will not only reduce demand for LPG but also lead to job losses and a negative impact on the economy and public health.
Ms Wanjiku Manyara, the institute's general manager, stated that the anticipated revenue from the tax will be outstripped by the attendant costs on children's lives, health, food security, deforestation, investments, jobs, wealth creation, exports, tourism, water, and sanitation.
The National Treasury had proposed introducing the 16% VAT on LPG, which would see its cost rise by more than Sh350 from July 1, with the aim of collecting Sh7 billion to finance development for fiscal 2021/22.
However, the institute has urged the government to retain cooking gas as zero-rated, citing the potential negative impact on the nation's economic growth and public health.
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