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Kenya Revenue Authority spares fuel from tax hike

Business

By Macharia Kamau | Oct 04, 2022

**It will be the second year in a row that KRA has not raised excise on petroleum products.** [File, Standard]

Consumers have been spared a hike in the cost of fuel that would have started this month.

This follows a decision by the Kenya Revenue Authority (KRA) to exempt petroleum products from the annual inflation adjustment of excise duty as the government tries to prevent a further increase in the cost of fuel.

It is the second year in a row that KRA has not raised excise on petroleum products.

This is even as other excisable products have been hit by the hike that will see excise duty go up by 6.3 per cent, which was the annual inflation rate for 2021/22 financial, according to the Kenya National Bureau of Statistics (KNBS).

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"We will make that adjustment on all other excisable products. The only category we will leave out is that of petroleum products because of the high prices of fuel ... we want to support Kenyans in ensuring that the price of fuel does not go higher," said KRA Commissioner General Githii Mburu during the launch of the taxpayer's month.

Excise duty currently stands at Sh21.95 per litre of petrol and Sh11 per litre of diesel and kerosene.

It is in addition to other taxes and levies that add up to Sh64.14 (super petrol), Sh53.39 (diesel) and Sh46.81 (kerosene).

While the Energy and Petroleum Regulatory Authority (Epra) announces maximum fuel prices on the 14th of every month, it does issue amendments to the price capping guide on October 1 in the case of inflation adjustment on excise duty.

Last year, KRA was stopped by the High Court from increasing excise duty on fuel after a case was filed challenging the higher taxes on account of fuel prices having shot up significantly and pushed up the cost of living.

The inflation adjustment on excise duty affects about 30 products including beer, SIM cards, boda boda, bottled water and juices.