Kisumu High Court on Monday ordered the government to compensate three individuals Ksh350,000 in a case challenging the 16 percent VAT on petroleum products.
This is after the three Kisumu residents withdrew a case successfully petitioning the High Court to stop implementation of the fuel Value Added Tax (VAT).
The State was ordered to compensate the three as the cost of the suit.
Sumawe Youth, a Kisumu lobby group, had obtained orders at the Bungoma High Court last week suspending the implementation of the VAT.
The matter which was certified as urgent had been petitioned through the group's lawyer Ken Amondi.
"Temporary conservatory orders be and are hereby granted quashing the decision the Kenya Revenue Authority and the Energy Regulatory Commission dated 1/9/18 to implement the Finance (VAT) Act 2013 levying 16% VAT on petroleum products from 1/9/18 to enable the president to either assent to or reject the amended Finance Bill passed by the National Assembly," a ruling signed by Justice Stephen Riechi read.
A few days later, the group sued the Energy Regulatory Commission (ERC) for contempt of court over the implementation of the 16% VAT on petroleum products.
The new tax levy has raised a heated debate in the recent past causing a public uproar that culminated into a strike by the Kenya Independent Petroleum Distributors Association (KIPEDA).
On his part, President Uhuru Kenyatta who was outside the country recommended an amendment of the Tax Bill from 16 to 8 percent against a 2-year postponement proposal by the MPs.
Some of the MPs have, however, opined that it would be easier for the Government to cut on its expenditure rather than raise the cost of living in a bid to earn more revenue.
