Parliament voted overwhelmingly on Wednesday to suspend the proposed VAT on Petroleum products that was to take effect from September 1.
The legislators’ decision, in an amendment introduced by Suna East MP Junet Mohamed, will now delay the implementation of the fuel levy for two more years, to the relief of taxpayers.
Junet had appealed to his colleagues to support him in shooting down the fuel tax proposal, saying ot would increase the cost of living and make life unbearable for the majority of Kenyans.
“If we impose the taxes, it will raise the cost of living to unimaginable levels. It is the time to rise to the occasion and ensure that we side with the people,”
Treasury CS Henry Rotich, who was in the chambers during the debate, had sought to introduce the VAT on fuel in the Bill as part of raising revenue to finance the Sh3.074 trillion budget.
The proposed tax would have seen petrol prices shoot to more than Sh131.93 per litre in Nairobi, while diesel and kerosene will cost highs of Sh119.18 and Sh98.54 from the current Sh102.74 and Sh84.95 per litre, respectively.
Economists had warned that increase in diesel and petrol will have a ripple effect on the prices of goods and services, saying they would rise by about 4% due to the increased cost of production and manufacturing.