The government has in the realization that the cost of cooking gas contributes to high cost of living proposed amendments to the VAT Act 2013 to zero-rate liquefied petroleum gas.
Treasury CS Njuguna Ndungu told Parliament on Thursday during presentation of the 2023-24 budget that besides promoting the uptake of cooking gas, it will help in promoting Kenya’s forest cover due to reduced usage of firewood as a source of energy.
“The high cost of liquefied petroleum gas contributes to the escalating cost of living and continued use of firewood and charcoal which negatively affects our forest cover,” Ndungu said.
“In order to make LPG affordable and promote its uptake as well as encourage the use of clean sources of energy, I’m proposing to the national assembly to zero-rate VAT on LPG,” the CS added.
The sum effect of this proposal is likely to see the cost of cooking gas drastically drop from the current average of Sh1,450 for a 6kg cylinder barrel.
This is in consideration of President William Ruto’s announcement on March 2 that the government was working on lowering the cost of gas cylinders to either Sh300 or Sh500 by June 2023.
The President, however, said on May 15 that this is not be attainable in the short term.
He said approval for the plan would be made in the 2023-24 budget, which Ndungu made no mention of.
“We must first approve this in the budget. As of now, there is no way to waive the tax until a new budget is passed. June 1 is not possible until we pass it through Parliament,” Ruto said during a media roundtable at State House, Nairobi.
“If we had passed it through the supplementary budget, June would be possible. But we tried to and it was not possible because it would force us to change a certain law,” he said.
