Relief for Kenyans after President Uhuru Kenyatta intervened to protect them from the high cost of life, particularly the price of cooking gas.
Following the signing of the Finance Act 2022, which will result in a reduction of the Value Added Tax (VAT) on cooking gas by half, President Uhuru made his intervention.
Initially, cooking gas was subject to a VAT of 16%; however, as a result of Uhuru’s action, the VAT will now be 8%.
As a result, it is anticipated that the retail price of cooking gas will decrease, providing assistance to Kenyans who are experiencing difficult economic times.
Due to Uhuru’s intervention, the cost of 13 kilograms of cooking gas will now decrease by at least Ksh230. The price of the essential item is currently Ksh3,500.
When the law goes into force, 6-kilogram gas prices will fall to Ksh1,420 from the current Ksh1,650 retail price.
The choice to reduce prices further, however, rests with the sellers, who must hold off until the reduced VAT is reflected in their purchase costs.
Kimani Ichung’wah, a Kikuyu member of parliament, led the charge for the VAT reduction.
“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.
As previously reported, the price of cooking oil increased by 47% between December 2020 and December 2021. According to data from the Kenya National Bureau of Statistics, Kenyans paid an average of KSh 303 per litre of the commodity in December 2021 up from KSh 206 in December 2020.
