Kenyans can breath a sigh of relief after President Uhuru Kenyatta intervened to save them from the high cost of living especially on the price of cooking gas.
President Uhuru’s intervention follows the signing of the Finance Act 2022 which will now see the Value Added Tax (VAT) on cooking gas slashed by half.
Initially, cooking gas attracted a VAT of 16 per cent but with Uhuru’s move, it will now stand at 8 per cent.
This means that the retail price of cooking gas is expected to fall offering relief to Kenyans who are confronting tough economic times.
President Uhuru Kenyatta signs deals at State House.
Uhuru’s intervention will now see the price of 13-kilogram cooking gas fall by at least Ksh230. At the moment, the crucial commodity is retailing at Ksh3,500.
At the same time 6-kilogram gas retails at Ksh1,650 but when the law takes effect, the prices will drop to Ksh1,420.
However, the decision to lower the prices further lies with the sellers who will have to wait until the slashed VAT reflects on their cost of acquisition.
The proposal to halve the VAT was fronted by Kikuyu Member of Parliament Kimani Ichung’wah.
“Section 5 of the Value-Added Tax Act, 2013 is amended by in the case of the supply of liquefied petroleum gas, including propane, eight percent,” his proposal read in part.
In 2016, the National Treasury dropped the VAT imposed on LPG gas in order to boost uptake among households that solely depended on other sources of fuel.
The move saw the price of 13-kilogram of cooking gas fall to Ksh2,000.
However, the decision to impose the 16 per cent VAT piled more pressure on families that are struggling to make ends meet due to job losses and slashed salaries.
Kenya’s inflation hit a 27-month high in May, squeezing households’ budgets and demand for goods and services. Other basic commodities have also seen sharp rise in prices forcing families to reduce their shopping baskets.
Other essential commodities whose prices went up include maize flour which is currently retailing at Ksh200 per 2Kg packet, cooking oil, fuel, and grains among others.
File photo of Gas Cylinders on display at an outlet in Nairobi City
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