Kenyan president Uhuru Kenyatta has proposed lowering the value added tax (VAT) on petroleum products from 16 to eight percent.
This after the president on Thursday failed to sign the finance bill which had sought to postpone the 16 percent VAT on petroleum products for a further two years.
But in an address to the nation on Friday, the head of state noted that ‘bold decisions’ would have to be made to support the country’s aggressive economic outlook.
“The Finance Bill 2018/19 brought to me yesterday fell short of this threshold. It protected the status quo and sacrificed the bigger vision. It took the easy path, instead of rising to the challenges of our time,” President Uhuru said.
Kenyans have since the start of the month protested the increased fuel prices citing pressure from the increased cost of living.
The cost of most basic commodities as well as transport has gone up since the 16 percent VAT was imposed on September 1.
President Kenyatta said the he had proposed a raft of changes to the finance bill, amongst them the halving the VAT on petroleum products.
“I have heard and understood your concerns, which is why I have proposed, as part of my memorandum, to cut VAT on petroleum products by 50 percent, from 16 percent to eight percent,” he said.
The imposition of the levy on petroleum products was initially suspended for three years when the VAT Act 2013 was enforced, but MPs extend the grace period for two years which expired on August 30.
The president noted that Kenya still faces gaps in financing, adding that massive budget cuts and austerity measures would be implemented.
“These budget cuts ask of us in government that we tighten our belts. It also ensures that the sacrifices made by tax-compliant Kenyans are matched by discipline from all of us in the public service,” President Uhuru said.