Unless the National Assembly, in a few hours time, does something quite uncharacteristic, and decides to alleviate Kenyans’ pain by amending Ukur Yattani’s budget estimates during today’s presentation of the budget on the floor of the House, then Kenyans had better begin marking the 30th of June on their calendars.
Traditionally, 30th of June has always been known as the final day of the government’s financial year, and so for this reason, most decisions and resolutions made on this day are usually made in corporate boardrooms and government agencies, not in the kitchens of households.
However, the end of government’s financial year for 2020/2021 is set to see major decisions made in hundreds of thousands of Kenyan Kitchens.
This follows resolutions reached by the Finance Act a year ago that touched on liquefied petroleum gas (LPG), but delayed the recommended changes for one year to July due to concerns about the cost of living.
Starting from July 1st, the price for cooking gas will increase by at least Sh350 more following the introduction of the 16 percent value-added tax on the commodity.
The Kenya Revenue Authority (KRA) said it would impose the 16 percent tax at the start of the new financial year in what is set to push it out of the reach of most households struggling with depressed incomes.
Currently, the 13-kilogramme cooking gas retails at Sh2,250, meaning that it would now increase to Sh2,610 when the new tax measures come into force.
Expensive gas will add to rising energy prices that have become a political headache for the government, which was this year forced to keep fuel prices unchanged to defuse public outrage over a monthly review that would have pushed costs to a historic high.
“The effective date of the amendment is 1st July 2021. This means that the supply of liquefied petroleum gas will be subject to VAT at standard rate of 16 percent from 1st July, 2021,” the KRA said.
Kenyan households have since June 2016 been enjoying low cooking gas prices after the Treasury scrapped the tax on LPG to cut costs and boost uptake among the poor who rely on dirty kerosene and charcoal for cooking.