Even the tea farmers in Kiambu County threaten to go on strike following the implementation of 16% VAT on petroleum products.

According to the Tea Farmers, the new tax has raised the cost of production and is likely to run them into losses.

The tea farmers called on President Uhuru Kenyatta to assent to the Finance Bill 2018 that will zero-rate VAT on petroleum products.

Their argument is , is that tea factories hugely rely on fuel to run operations and an increase in petroleum products coupled with a ban on logging activities is likely to run them into losses.

Already Parliament had amended the Finance Bill 2018 to postpone implementation of VAT on petroleum products for two years however, the Bill is yet to be signed into law to effect the changes.

Meanwhile, the subject has drawn sharp criticism across board with the public against the move aimed at raising funds to finance the budget since the coming into effect of the 16% Value Added tax on petroleum products even though the move is aimed at raising funds to finance the budget.

Petroleum is now one of the highest taxed commodities in the country bearing a number of levies and taxes currently at Kshs.55.16 on super petrol, Kshs.43.87 on diesel and Kshs.25.93 on Kerosene.

The move to have VAT on petroleum products was mandated by the International Monetary Fund (IMF) as a method for Kenya to better deal with its public debt.

The condition that was set by the IMF is part of an agreement for a standby credit facility that would allow emergency borrowing in the event of economic shocks.

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This move is expected to burden the taxpayer approximately 71 billion shillings according to the Treasury.

The change of policy is expected to increase tax revenue, contain the level of debt and improve the balance of payments of Kenya.

The move has taken the prices of petrol and diesel to another consecutive peak price in four years resulting in average figures of Kshs.128.70 per liter of super petrol and Kshs.116.20 per liter for diesel.

The consumption of diesel tops the petroleum chart with 210 million liters used a month by Kenya whereas super petrol has a usage of 140 million liters a month.

Kerosene follows with 50 million liters being consumed per month.

This demonstrates that the VAT will cause price increases for all users of petroleum across uses and sectors, thereby driving up the cost of living and affecting Kenya’s competitiveness.

By Malachi Motano

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https://i1.wp.com/farmerstrend.co.ke/wp-content/uploads/2018/09/Sasini-tea-farmers-during-farmers-open-day-in-Kiambu.jpg?fit=860%2C645&ssl=1https://i1.wp.com/farmerstrend.co.ke/wp-content/uploads/2018/09/Sasini-tea-farmers-during-farmers-open-day-in-Kiambu.jpg?resize=150%2C150&ssl=1#FarmersTrendFarming NewsEven the tea farmers in Kiambu County threaten to go on strike following the implementation of 16% VAT on petroleum products. According to the Tea Farmers, the new tax has raised the cost of production and is likely to run them into losses. The tea farmers called on President Uhuru Kenyatta...New generation culture in agriculture