The government, on Thursday, April 27, proposed exempting Liquefied Petroleum Gas (LPG) from Value Added Tax (VAT).
In a press release sent to newsrooms, President William Ruto's administration indicated that the strategy would be achieved through Bottom-Up Economic Transformation Budget for the Financial Year of 2023/2024.
LPG will further be exempted from Railway Development Levy (RDL) and Import Declaration Fees (IDF).
"To reduce the cost of liquefied petroleum gas (LPG) and make it affordable, reduce the use of biomass fuel and destruction of our forests, the Bill proposes to exempt LPG from VAT," the proposal reads in part.
In a further plan to lower the cost of living, measures to support the tea industry were also highlighted.
"In order to promote local processing of tea and value addition for export, the Bill proposes to exempt from VAT, tea purchased from factories or the auction centre for export.
"In addition, there is a deliberate assessment of tax incentives required for the domestic capacity of packaging materials to support value-addition for the tea export Industry," the proposal detailed.
The Finance Bill 2023 detailed that apart from exempting LPG from tax, it had identified 9 economic areas that would be boosted with Ksh267 billion to mainstream the Bottom-up transformation agenda.
Among the value chains listed were Cotton to Textile and Apparel, Edible Oil Crop Production, Dairy, Leather and Leather Products, Rice Production, Tea, Blue Economy and Fisheries, Minerals and Tree Planting, and Construction and Building material.
While LPG investors will benefit from the Finance Bill 2023, the government proposed increasing taxation on imported fish.
"To support the local Industries and expand the tax base, the Bill seeks to introduce excise duty on imported fish and Imported furniture," the Bill read in part.
President William Ruto had earlier promised that his government would lower the price of an empty gas cylinder.
On Thursday, March 23, Ruto reiterated that his administration initiated measures to reduce the prices of cooking gas across the country.
"We will allocate money that will enable us to reduce cooking gas prices. We will do away with taxes and enable our women to cook without thinking about their health," the President promised back then.
