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Lender’s push for 16pc VAT on fuel irrational
A 16 per cent loading on retail pump prices which are already above Sh100 per litre (and still rising) will trigger harmful inflationary impacts across the entire economy. FILE PHOTO | NMG
There are indications that the Treasury could indeed be implementing the 16 per cent VAT on petroleum products, an action that was deferred two years ago. The VAT was a key financial condition prescribed by the IMF for Kenya to improve domestic revenues and tame the mounting public debt.
Another condition is understood to be the scraping of the interest rates capping law. That the Treasury would accept to implement the petroleum VAT at a time when global oil prices are on the rise points to a serious debt predicament.
