Kenyans may soon have to spend more on fuel, electricity and other basic commodities as the government seeks to introduce new levies to bridge its budget deficit.
The leader of Majority in the National Assembly, Aden Duale, tabled a bill in parliament that will target different sectors.
The government will impose fresh taxes in energy as it reintroduces a 16 percent value-added tax (VAT) on petroleum products.
The Duale-sponsored Energy Bill 2018 proposes the cost of fuel and electricity to go up by about 40 per cent.
The Bill further proposes a 0.5 percent Energy Regulatory Commission (ERC) fee to be imposed on petroleum and electricity.
If the bill is passed into law, geothermal power producing companies will be charged a 2.5 percent royalty fee which is likely to be passed to consumers.
“The proposed royalties will be shared by the national government and communities,” argued Mr. Duale as quoted by the standard.
“At the moment, the energy sector is heavily taxed. We cannot afford to add another Sh17 to the current price of petrol. Introducing VAT on fuel will hurt the common mwananchi,” said Narok Senator Ledama Olekina who has opposed the additional taxes.
Treasury Cabinet Secretary Henry Rotich had said that the government failed to collect enough revenue adding that counties will now reduce their budgets.
The CS also urged government institutions to cut down wastage of resources and improve efficiency in the money allocated to them.