Relief as High Court stops new tax on petroleum products
The High Court in Bungoma on Thursday granted temporary orders stopping the levying of 16 per cent VAT on fuel products.
The petitioners represented by Advocate Ken Amondi argued that the Treasury Cabinet Secretary Henry Rotich had flouted core constitutional principles and values in arriving at the decision which has caused a public outcry.
Justice Stephen Riechi further ordered that the matter be mentioned on September 12, 2018 at the High Court in Kisumu.
The petition was filed by a lobby group from Kisumu on September 3 under a certificate of urgency.
“I can confirm that we have been granted the orders to stop the fuel levy. We will serve the CS Treasury and the Energy Regulatory Commission (ERC) for implementation,” said Mr Amondi on the phone on Thursday.
The additional fuel charges are contained in the Finance Act 2013 and are in line with Kenya’s promise to the International Monetary Fund (IMF) six years ago to do away with tax exemptions as part of a wider plan to grow revenues, reduce budget deficits and ultimately slow down the debt pile-up that has in recent months become a source of national concern.
The tax was first introduced on petrol, diesel, kerosene and jet fuel in the VAT Act of 2013, with a three-year grace period that would have seen it come into force in 2016.
However, MPs voted to defer its introduction to September 2018.
Again, on Wednesday last week, during the debate on the Finance Bill 2018, MPs overwhelmingly voted to suspend the tax for another two years.