Uhuru’s intervention saves TSWT from high cooking gas prices

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TSWT can breathe a sigh of relief after President Uhuru Kenyatta stepped in to save them from the high cost of living, especially the price of cooking gas.

President Uhuru’s intervention follows the signing of the 2022 finance law which will now see the value added tax (VAT) on cooking gas reduced by half.

Initially, cooking gas attracted a VAT of 16%, but with Uhuru’s move, it will now rise to 8%.

This means the retail price of cooking gas is expected to drop, providing relief to TSWT who are facing tough economic times.

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President Uhuru Kenyatta signs agreements at State House.

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Uhuru’s intervention will now see the price of 13 kilogram cooking gas fall by at least Ksh 230. At present, the crucial merchandise is retailing at Ksh 3,500.

At the same time, 6-kilogram petrol sells for Ksh 1,650, but when the law comes into effect, prices will drop to Ksh 1,420.

However, the decision to lower prices further rests with sellers who will have to wait for the reduced VAT to affect their cost of acquisition.

The proposal to halve the VAT was presented by Kikuyu MP Kimani Ichung’wah.

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“Section 5 of the Value Added Tax Act 2013 is amended by, in the case of the supply of liquefied petroleum gas, including propane, eight per cent,” reads in part its proposal.

In 2016, the National Treasury removed the VAT imposed on LPG gas to stimulate adoption by households that relied solely on other fuel sources.

This move saw the price of 13 kilograms of cooking gas fall to Ksh 2,000.

However, the decision to impose the 16% VAT has increased pressure on families who are struggling to make ends meet due to job losses and lower wages.

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Inflation in Kenya hit a 27-month high in May, tightening household budgets and demand for goods and services. Other basic products have also seen a sharp rise in prices forcing families to reduce their shopping baskets.

Other staples whose prices have risen include maize meal which is currently selling at Ksh 200 per 2 kg pack, cooking oil, fuel and cereals among others.

File photo of gas cylinders on display at an outlet in the city of Nairobi

File photo of gas cylinders on display at an outlet in the city of Nairobi

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