Our attention is drawn to the National Treasury Principal Secretary Kamau Thugge proposal to hike the cost of Petroleum fuel to Sh130 per litre. We are concerned that the proposal to add VAT on fuel is driven by the IMF and not the Kenyan Government.
By his admission, the proposal does not meet the threshold of Article 10 of the Constitution. If allowed, the move will put the taxation levels on a litre of petrol to a staggering 70%.
In order to realize the Big 4 Agenda, it is our expectation that the tax burden would be lessened on all forms of energy, fuel included. By dint of this proposed measure, the cost of travelling, transport of goods, food and general inflation will radically rise. Needless to mention, this would occasion shrinking of consumer spending and with it, unemployment and flooding of counterfeit goods shall be enhanced.
Our plea therefore is that the proposal is immediately put on hold to allow further stakeholders consultations. Regrettably, if our plea is not heeded to, we may have no other option but to seek legal redress.
On a related note, Cofek wishes to announce that we will move to the Energy Tribunal in line with Section 107 of the Energy Act to appeal the decision of the Energy Regulatory Commission (ERC) on new electricity tariffs with regard to consumers using between 11 to 50 KW/h.
Our view is that the drastic increment from Sh2.50 to Sh15.80 for this category has no justification whatsoever.