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Tough times ahead as State introduces taxes on kerosene to fund spending plan

By Lee Mwiti | Published Thu, June 9th 2016 at 12:25, Updated June 9th 2016 at 12:33 GMT +3

Low-income earners who depend on kerosene for household needs were hit hard after the State announced new tax on the commodity.

And to encourage the use of energy-efficient stoves that are environmentally friendly, import duty on stoves was reduced from 25 per cent to 10 per cent.

Treasury Cabinet Secretary Henry Rotich said: "The removal of excise duty on kerosene in 2011 was intended to cushion low-income earners against high prices of this petroleum product. However, the removal of the tax has since resulted in increased adulteration of fuel in the country. This has denied the oil marketers business in the neighbouring countries in addition to giving them a bad reputation. In addition, adulteration negatively impacts car engines and increases their maintenance costs. In order to discourage this harmful practice, I propose to introduce excise duty on kerosene at Sh7, 205 per 1000 litres."

The Government targets to produce 5000MW of energy.

The wind turbines rolling in Lake Turkana are expected to contribute 300MW in the next one year.

Treasury Cabinet Secretary Henry Rotich said in the past three years, 615MW have been added to the national grid. "We are implementing a programme to connect at least 70 per cent of Kenyan households to electricity by 2017 and subsequently reduce the connection cost and time by at least 60 per cent in the medium term," he said.

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