More Pain For LPG Users As 16 Percent VAT Is Imposed

Cooking gas will no longer be zero-rated in Kenya according to what Kenya Revenue Authority (KRA) told Bloomberg. Starting July 1, 2021, KRA will be imposing a 16 percent Value Added Tax on cooking gas to raise more revenue.

The imposing of 16 percent VAT on LPG is set to hit hard on millions of Kenyans whose income has greatly been affected by the Covid-19 pandemic. It will also force millions to look for an alternative way of cooking such as the use of firewood and charcoal.

The government of Kenya had zero-rated LPG to encourage more Kenyans to embrace a more clean way of cooking in an effort aimed at conserving forests across the country. It seems it was a trick to get more people on board.

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The revelation to introduce a tax on LPG comes barely a month after it emerged that the International Monetary Fund (IMF) was piling pressure on the National Treasury to double VAT on all petroleum products in order to widen the tax net.

The Energy Petroleum and Regulatory Authority (EPRA) has been increasing the price of fuel with each passing month, forcing Kenyans to protest. For the first time, the price of fuel did not change for the month of April but still higher than other East African Countries.

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During the week, the High Court, while sitting in Machakos, stopped the implementation of the controversial Minimum Tax until the case that has been presented against it is hear and determined. The case is set to be heard before the next installment on May 20.