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Court saves Kenyans from high fuel price

SHIPPING & LOGISTICS
By Kamau Muthoni | September 28th 2021

According to EPRA, the new prices were inclusive of eight per cent value-added tax. [Courtesy]

Kenyans have a reason to smile after the High Court blocked the Government from effecting new tax levy on petroleum products.

High Court judge James Makau barred the Kenya Revenue Authority (KRA) from demanding excise tax from oil marketers, effectively cushioning Kenyans from high fuel prices. The orders by the judge will take effect in the next fuel cost adjustment cycle, October 1.

“Pending the hearing and determination of this application inter parte, this court be pleased to issue temporary conservatory orders quashing the decision by the Commissioner-General of the Kenya Revenue Authority to adjust excise duty rates for petroleum products effective October 1, 2021,” ruled Justice Makau.

The case was filed by Isaiah Odando and Wilson Yata through lawyer Kenneth Amondi. They argued that the new levy on petroleum products have subjected Kenyans to suffering with high cost of living and wants the court to suspend its implementation pending determination of the suit.

Should the court agree with their petition and suspend the new tax laws, it will be a huge relief to members of the public who have been lamenting over the high fuel prices that is likely to worsen the already high cost of living.

“The decision to adjust excise duty for petroleum products is a burden to an already overtaxed Kenyans. It is worsened by the fact that it comes at a time when Kenyans are reeling from economic consequences of Covid-19 thereby compromising their entitlement to social justice,” said Omondi.

The Energy and Petroleum Regulatory Authority (EPRA) last week announced new cost of fuel for an all-time high where a litre of petrol went up by Sh7.58, diesel went up by Sh7.95 while kerosene went up by Sh12.97. Due to the increase, fuel price at the pump for petrol started retailing at an average of Sh134.72 per litre, diesel at Sh115.60 and kerosene at Sh110.81.

According to EPRA, the new prices were inclusive of eight per cent value-added tax and the revised rates for excise duty tax imposed on imported goods. But the two individuals through their lawyer claimed that EPRA, KRA and the Treasury have ignored the plight of Kenyans who will be forced to bear the high taxes through increased price for food, transportation and other basic commodities.

They also accused the National Assembly for ignoring the people when they allowed and approved the new tax laws which has led to increased fuel prices.

“Parliament ignored the voice of the people by appropriating funds for expenditure by national government and its other agencies through allocation of national revenues without considering that the source of funds is definitely high taxation of the populace,” said Omondi.

According to the petitioners, it was hypocritical for MPs and their party leaders to condemn EPRA for increasing the fuel prices when they had a chance in parliament to reject the Finance Act 2013 which created the basis for the fuel hikes. He added that it was ironical that the country charges high taxes more than the cost of importing fuel.

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