For quite some time, Kenyans have been questioning the motives behind the government's persistent push to pass the Finance Bill 2023, which includes significant tax increases across various economic sectors, placing a burden on employers & employees and business establishments.
On June 21, the National Assembly (NA) proceeded with this agenda and voted in favor of a substantial rise in the Value Added Tax (VAT) for fuel, raising it from 8 percent to 16 percent. This development that triggered nationwide outrage.
Molo MP Kimani Kuria, the Chairman of the Finance and National Planning Committee, has shed light on the political intrigues that compelled President William Ruto to rally his allies to forcefully pass an unpopular legislation. This move has the potential to jeopardize the political futures of several Members of Parliament in the upcoming general elections.
Speaking during an interview with Citizen TV, Kimani Kuria revealed that President William Ruto’s persistence was down to an international commitment he made. The lawmaker claimed that the Head of State had made an international commitment to cut fossil fuel usage which he said necessitated the rise in taxes.
“There is a global discussion about climate change and going green. Many countries across the world are moving away from consumption of fossil fuel to consumption of clean energy,” he explained the rationale behind the fuel VAT spike.
He added that the Finance Committee, in lieu of that commitment, decided to look at alternatives for fossil fuel.
Kimani highlighted that the Finance Bill zero rated bio ethanol fuel and Liquefied Petroleum Gas (LPG) so that many Kenyans can move towards clean energy.
Kimani highlighted the advantages of bioethanol fuel and emphasized that the policies outlined in the Finance Bill enable clean energy initiatives, resulting in significant benefits for Kenyans. Notably, he mentioned that under these policies, it becomes feasible for Kenyans to prepare a meal for four people using fuel worth only Ksh10.
“In terms of using fuel for vehicular movement, most people are buying hybrid cars. We did provide tax incentives for manufacturing of electric cars,” he clarified.
Nominated MP John Mbadi, who was part of the panel, sharply disagreed with Kimani's explanation noting that the fuel tax surge was disadvantageous to Kenyans.
He acknowledged the impracticality of making international commitments and abruptly transitioning away from fossil fuels.
“This has defeated even the most developed countries. Also, you cannot make life expensive and difficult for Kenyans so that you can fulfil some obligations or treaties you signed somewhere,” he vented.
Mbadi added that it was unfair to burden Kenyans especially because they are not privy to the signing of these treaties.
Meanwhile, Kenyans are fearful that in July, the price of a litre of petrol is likely to hit the dreaded Ksh200 mark making the overall cost of household items and life more expensive.
