The government will impose a 14 percent value-added tax on liquefied petroleum gas (LPG) as from July 1 when the Finance Bill 2020 takes effect.
This will see the price of the commodity rise exponentially by between Ksh150 and Ksh300 for refilling the 6kg and 13kg cylinders respectively.
LPG has not been included in the tax bracket since 2016, a move that saw the lower income earners afford the commodity.
Since then, most people have been able to acquire gas cylinders in place of kerosene stoves that the government has been discouraging for cooking.
The price of refilling a 6-kg gas cylinder is between Ksh900 and Ksh1100, and if the the VAT is effected the price could shoot close to Ksh1300.
The price of refilling a 13-kg cylinder will as well shoot by around Ksh300. The 6-kg cylinder is the most common with Kenyans.
Read: Kenya Loses Over Ksh100 Billion In Revenue Every Year To Illicit Trade – Report
Kenyans have now approximately two weeks up to the end of the month, when a new financial year starts and the changes take effect.
“Contents of Finance Bill are expected to be law by July. This means new taxes will take effect when the new financial year starts,” said Treasury CS Ukur Yatani.
This comes at a time the demand for cooking gas has gone higher as Kenyans stay at home for most of their time due to Covid-19 pandemic.
Also, most people around the globe are anticipating the fall of gas prices due to the fall of crude oil prices globally.
The price of the commodity will further go up if the government reverses its decision to reduce VAT from 16 percent to 14 percent, which was reduced by President Uhuru Kenyatta in March to cushion Kenyans against the effects of Covid-19.
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