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Economy

MPs’ meeting on high fuel prices postponed

President Kenyatta
President Kenyatta is expected to make a decision on whether or not to sign the Finance Bill 2018. FILE PHOTO | NMG 

The planned informal meeting of MPs known as Kamukunji called to deliberate on the increase in fuel prices failed to take place on Tuesday.

The meeting, convened by Nandi Hills MP Alfred Keter, was put on hold to await the decision of President Uhuru Kenyatta who is due back into the country from China.

President Kenyatta is expected to make a decision on whether or not to sign the Finance Bill 2018, which contains amendments that will push by two more years the implementation of the 16 per cent value added tax (VAT) on petroleum products.

The VAT levy took effect on September 1, two days after MPs voted to defer the collection of tax on petroleum to September 2020. The VAT law was enacted through the Finance Bill 2013, but was delayed by three years. The MPs in 2016 changed the Finance Bill to delay the implementation of the law by two more years.

“We have had discussions with 57 MPs through our WhatsApp group and agreed to formulate a 20-member team that will look into the issue of taxation in a more holistic manner.

“This matter is bigger than we thought because the Treasury has to raise taxes to finance the Sh3 trillion budget. We raise about Sh1.8 trillion in revenue which leaves us with a budget shortfall of Sh2trn. We are also required to service debt of about Sh80bn,” Mr Keter said.

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