More taxes on petroleum will stall economy - KEPSA

KEPSA says the value added tax on petroleum will make life unbearably expensive for Kenyans. [Courtesy]

Private sector players in Kenya want the Government to put on hold plans 16 per cent Value Added Tax on petroleum products that come into effect September, noting it will make life unbearably expensive for Kenyans.

The Kenya Private Sector Alliance (KEPSA) said the Government should instead implement initiatives that can enable businesses grow and in turn increase tax collections.

The lobby also wants Treasury to expand the tax bracket and quit relying to grow revenues, noting the tax paying businesses are already overburdened.

“Fuel being the main input in our energy- intensive sectors, the projected rise in pump prices will result in an increase in the cost of production and manufacturing of commodities by both small and big businesses, an increase in cost of transport and an increase in cost of household consumption of goods and services,” said Carole Kariuki chief executive KEPSA.

“We propose that government reconsiders the proposal to charge VAT on fuel, and instead consider pro-business strategies that strike a structural fiscal balance, address the inefficiencies with our tax collections systems, and increasing the tax bracket to avoid tax fatigue by a few tax payers.”

The new taxes on petroleum products are part of fiscal consolidation backed by the International Monetary Fund, in which the Government seeks to reduce debt uptake and increase its tax revenues.