The Energy and Petroleum Regulatory Authority (EPRA) has once again opted not to lower the Value Added Tax (VAT) on petroleum products, despite a recent court ruling that declared parts of the Finance Act 2023 unconstitutional.
The decision has maintained fuel prices at exorbitant levels, sparking outrage among consumers already grappling with the high cost of living.
The Finance Act of 2022 introduced a raft of tax measures, including an increase in VAT on petroleum products from 8% to 16%.
This was followed by the Finance Act 2023, which further sought to increase various taxes.
However, a section of Kenyans challenged the constitutionality of the latter, leading to a court ruling that temporarily suspended its implementation.
Despite the ruling, EPRAhas maintained the 16% VAT on petrol, diesel and kerosene. This means that fuel prices for the period August 15 to September 14 will remain at Sh188 for petrol, Sh171.5 for diesel, and Sh161.7 for kerosene.
These prices represent a significant burden on consumers, considering the upward trend in the cost of living.
EPRA’s decision to ignore the court order has raised eyebrows, with legal experts questioning the authority’s disregard for the rule of law.
By maintaining high VAT, EPRA is effectively undermining the judiciary’s role in interpreting the law and protecting citizens’ rights.
The continued high fuel prices are expected to have a ripple effect on the economy. As a key input in transportation and production, fuel costs are often passed on to consumers in the form of higher prices for goods and services.
This could exacerbate inflationary pressures, making it even more difficult for ordinary Kenyans to make ends meet.
The public outcry over high fuel prices has been palpable. Many Kenyans have expressed frustration and anger at the government’s apparent indifference to their plight. The situation has the potential to escalate into civil unrest if not addressed promptly and effectively.
The government must now tread carefully. Legal action against EPRA for defying the court order cannot be ruled out.
Furthermore, there is a growing need for clarity in tax policies to avoid such controversies in the future.
Regulatory bodies must also be held accountable for their actions to ensure compliance with the law and protection of consumer interests.
EPRA‘s decision to maintain high VAT on petroleum products is a major setback for Kenyan consumers already grappling with economic hardships.
Disregard for the court ruling is a dangerous precedent that could erode public trust in government institutions.
It is imperative that the government takes decisive action to address this issue and restore confidence in the rule of law.
