Kenya removes LPG gas from zero-rated items

By Samuel Ouma

Kenyans will be paying more for the liquefied petroleum gas, locally known as cooking gas, after Kenya Revenue Authority (KRA) re-introduced 16 percent Value Added Tax (VAT) effective July 1, 2021.

The move is aimed at boosting revenue collection, a representative of the taxman told Bloomberg on Wednesday.

“We cannot at the moment, provide a reliable estimate on the revenue expected to be raised from the imposition of VAT on LPG,” said KRA rep.

Kenya’s treasury scrapped VAT on cooking gas in June 2016 to encourage people to adopt clean energy and reduce the use of charcoal and paraffin.

The Finance Bill 2020 re-introduced the levies; however, the implementation was delayed until the second half of 2021 due to the economic crisis occasioned by the Covid-19 pandemic.

The National Assembly and the National Treasury, in agreement, noted adverse effects of the coronavirus such as job losses as the main cause of the deferred implementation.

The introduction of the tax would make life more unbearable to Kenyans who are already grappling with the high cost of living.