Kenyans are set for worse financial times, especially within their households amidst an increase in the prices of cooking gas.
There are also fears of a looming shortage of the commodity after more than 200 Liquid Petroleum Gas (LPG) trucks are held at the Kenya-Tanzania border in a week-long tax dispute.
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Media reports indicated that the truck operators faulted the government for allegedly hiking taxes for trucks in transit.
Chairman of the Independent Gas Dealers Association, Yusuf Hussein, claimed that the Kenya Revenue Authority (KRA) imposed the taxes without notifying them, increasing the levies from $605 (Ksh70,000) per ton of LPG to $930 (Ksh108,000) per ton of LPG, an increase of 325 dollars per truck.
“We were not given any notice by KRA about the increase of the taxes, our trucks were just stopped at the border with customs demanding extra monies.
“What I’m getting from our supplies is that they have increased the prices by Ksh37,732. If you look at it, it’s a huge increase in pricing,” he noted.
The truck drivers expressed worry that marooning some of their tanks in the sun for more than five days would pose a safety risk as they started leaking LPG, increasing the risk of their explosion.
The gas dealers noted that in the event KRA imposes the new taxes, they will be forced to hike their prices to consumers from Ksh170 per kilogram to Ksh250 per kilogram, meaning that the prices of the 6KG gas which currently retails at Ksh1,200 would shoot up to Ksh1,500 and the 13KG gas which retails at Ksh3,000 to Ksh3,500.
However, KRA indicated that the claims were false, adding that the VAT tax was in place since its reintroduction in July 2021.
“KRA would like to clarify that the information is not true and misleading. The VAT on LPG currently being enforced was reintroduced in July 2021 and is not a new tax as reported. During a recent compliance check, KRA noted that there have been cases of undervaluation by importers on LPG products, which is an offence.”
“The reports were provided to the taxpayers for compliance and the affected importers will be facilitated to clear their consignments after full compliance,” stated the taxman.
The authority further noted that the owners of the trucks were directed to clear their LPG consignments from the Namanga border in compliance, following talks with the importers.
