The State has revealed a fresh plan to scrap all taxes on cooking gas and cylinders amid multi-billion shilling investments in the sector in the latest effort to fast-track Kenya’s transition to clean energy.
President William Ruto’s Cabinet on Monday proposed the tax cuts meant to make the fuel affordable to more households.
“The following have been proposed; removal of the taxes on locally manufactured cylinders, on liquefied petroleum gas (LPG) product as well as on the cost of the cylinder revalidation,” said a Cabinet dispatch last evening.
The only tax currently charged on LPG is the Petroleum Development Fund Levy at a rate of Sh0.40 per kilogramme while LPG cylinders attract six taxes, including Value Added Tax (VAT) at a rate of 8.0 percent, Import Declaration Fee of 3.5 percent and Railway Development Levy (RDL) at a rate of 2.0 percent of the cost, insurance and freight (CIF) value.
Other taxes on cylinders are import duty at a rate of 25 percent of the CIF and excise duty at 35 percent.
The proposal comes days after retail prices of cooking gas jumped by at least Sh260 for the 13-kilogramme cylinder to Sh3,160 from Sh2,900 in July. The cost of the six-kilogramme cylinder has also increased to Sh1,380 from Sh1,200 at city stations.
