16% fuel VAT will cripple transport sector – MP Wangwae

Navakholo MP Emmanuel Wangwe says the proposed 16 per cent VAT on fuel under the Finance Bill, 2023 will cripple the transport industry.

Speaking on Citizen TV’s Day Break show on Wednesday, the parliamentarian said the 8 per cent increase in fuel levy will affect not just the public service vehicle sector, but also the cost of education due to school bus transport.

“The effect it will have on the economy is very enormous. It’s actually cutting across everyone. Once you increase it from 8% to 16%. All school buses use diesel. What is going to happen is we are going to have it as an effect.”  Wangwe said.

As the debate over the Finance Bill 2023 continues to gain momentum, a section of Kenyans have taken issue with its proposal to double the VAT on petroleum products from the current 8% to 16% in a bid to raise revenue.

According to Wangwae, the move may see fuel prices go up by up to Ksh.10 amidst a skyrocketing cost of living that has already attracted public outcry. 

“There is an upward shift from 8% to 16%. It’s something that you can compare and say the 8% to 16% the ripple effect is Ksh.10 to Ksh.11 more on each petroleum product,” the MP said.

All eyes are on the lawmakers as they are set to go on the floor of the House on Wednesday to discuss the controversial bill.

If passed into law, fuel prices will be subject to 16 per cent VAT, pushing up pump prices. Fuel prices in Kenya are already at an all-time high, following the government’s plan to drop subsidies.