The National Assembly kicked off a series of talks that is aimed at resolving the 16 percent value added tax on petroleum products .
While speaking to journalists, Attorney General Paul Kihara and other top members of the Executive, Speaker Justin Muturi said he is optimistic a solution will be found but he did not give timelines the interview was after a long meeting with Treasury cabinet Secretary Henry Rotich.
CS Rotich also spoke to journalists where he urged Kenyans to be patient while exuding confidence that they will resolve the issue.
A section of MPs have vowed to impeach the Treasury CS for failing to respect Parliament’s decision to have the new VAT suspended for two years in their recommendation to President Uhuru Kenyatta who is however yet to sign the Finance Bill 2018.
The 16 per cent VAT was implemeted as of 1st September with Cabinet Secretary’s directive.
According to the CS, the move to suspend implementation of the fuel tax by two years is null and void.
Matatu operators had earlier indicated that they would increase fares by 20percent starting September 1.
However Parliament suspended the implementation of the new Value Added Tax (VAT) on petroleum products following public uproar.
Consumers Federation of Kenya later raised concerns that an increase in fuel prices would result on a hike on consumer price surges.
The law had been continuously suspended to date, but the window closes on August 31.
IMF has been piling pressure on the government to end the suspension and raise its revenues and reduce budget deficits while slowing down spiralling debt.
Fuel products are part of Kenya’s most taxed commodities; on landing at the port of Mombasa, a litre of Super Petrol is priced at Ksh.57.53.
Storage and distribution charges at Ksh.4.41 are added to this figure, while a profit margin for importers is set at Ksh.7 a litre.
Dealers have a margin of Ksh.3.89; under taxes and government levies, a total of Ksh.39.37 is collected from every litre of petrol purchased.
This comprises Ksh.19.90 in excise duty: Ksh.18 for road maintenance, 65 cents for petroleum development and regulation while 82 cents are charged on every litre for development of railway network.