Kenyans can now breathe a sigh of relief after MPs voted to suspend the implementation of 16 per cent VAT on petroleum products.
The amendment to the Finance Bill, 2018 moved by National Assembly Minority Whip Junet Mohammed was meant to cushion Kenyans from the high cost of living.
The levy will now take effect on September 1, 2020.
The Bill meant hard times for low income earners as prices of basic commodities including fares were to rise.
National Assembly Minority Leader John Mbadi said the implementation of the 16 percent VAT should be shelved forever.
“We need to postpone the tax for another two years but the House need to decide after this to do away with the tax altogether,” said Mbadi.
The Suba South MP said that implementing the tax would have occasioned an increase in the price of commodities by at least more than 10 per cent further making life harder for most Kenyans.
“The transport cost would have risen by over 20 per cent. This is an amendment this House must support,” he said.
In June, Treasury CS Henry Rotich said petroleum products will start attracting 16 per cent VAT from September 1.
This would have raised by Sh17 every litre of the commodity.
Rotich argued the implementation of the Bill was in line with agreements with the International Monetary Fund.