Kenyans to continue feeling the pain of new tax

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Kenyans it appears will continue to pay more for petroleum products after the government maintained that the newly implemented tax on fuel will remain in place.

Treasury Chief Administrative Secretary Nelson Gaichuhie on Wednesday told Senators that the government is yet to be served with a court order stopping the implementation of the 16% VAT even as the High Court in Bungoma on Wednesday ruled that the temporary orders stopping implementation of the tax still stands.

Gaichuhie however says consultations are ongoing as the government seeks to cushion Kenyans against the ripple effects of the new tax.

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There appears to be no letup in the ongoing standoff over the government’s move to impose a 16% Value Added Tax on Petroleum products.

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Days after Parliament suspended the implementation of the tax, treasury went ahead with its implementation igniting fury among Kenyans.

But on Wednesday, Treasury maintained that it will not waive the levy, instead challenging Parliament to repeal the law and scrap off the tax once and for all.

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While appearing before the Senate’s Energy Committee, Gaichuhie told lawmakers that key government development projects were highly dependent on the now infamous levy.

Treasury also denied allegations that the government was intending to raise 70 billion shillings from the tax as widely reported in the media.

The government has in the meantime denied being in contempt of court, insisting that it has not been served with the court order suspending the implementation of the fuel levy.

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But even as Treasury and ERC denied knowledge of the order, the High Court sitting in Bungoma on Wednesday ruled that the temporary orders stopping the implementation of the tax still stands.

Judge Fred Ochieng ruled that the order stopping the implementation of the tax remains in place until it is set aside.

The Finance Bill 2018 which suspended the tax for a further two years is still awaiting Presidential assent.

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