Kenyans are just one step away from enjoying lower fuel prices after MPs recommended cutting onerous taxes by almost half.
The National Assembly Finance Committee recommended the cuts in an am Report submitted Tuesday.
The Homa Bay Woman Representative’s team, led by Gladys Wanga, has proposed increasing the Petroleum Development Levy from Sh5.40 to Sh2.90 on every liter of premium gasoline and diesel
MEPs have therefore proposed the repeal of the regulation on the oil development tax 2020 (Legal Notice Nos. 124 and 174 of 2020), which provides for the tax.
The committee has the plenary asked to amend the Petroleum Development Fund Act, 1991, by providing Sh2.90 the levy per liter of premium gasoline and diesel.
MPs have also recommended that VAT on petroleum products be cut in half four percent will be reduced.
“Amendment to the VAT Act of 2015 to reflect the change in the tax rate on petroleum a nd petroleum products,” states the report.
The committee has approved the national The Treasury Department also recommended that additional estimates be made to reflect the revenue decline caused by the changes.
Cooking gas consumers may also receive a respite if MPs approve the proposal to reduce VAT to four percent.
MEPs have also recommended that the gross margins of oil marketing companies be reduced from the current 12 Sh. per liter to 9.
You are aiming for an amendment to the Energy (Petroleum Pricing) Regulations, 2010, and the Petroleum Development Act, 2019.
The legislature also has a waiver on the inflation adjustment for fuels proposed for the 2021/22 financial year.
“The committee has attached the draft law with the amendments to this report,” said Wanga.
The National Assembly would also like to that the Petroleum Fund is administered by a board of directors.
“We strongly recommend that the fund be used to stabilize fuel prices and for matters related to the development of joint facilities for the distribution or testing of oil products”, states the report.
MEPs also want a new formula for distributing money from the fund to oil marketing companies.
The committee report followed public participation with various stakeholders, i including the National Treasury, Energy and Petroleum Regulatory Authority, Petroleum Principal Secretary and other actors in the petroleum industry.