More pain at pump as KRA includes fuel in fresh tax adjustment
The Kenya Revenue Authority (KRA) has included petroleum products in its fuel adjustments specific rates of exercise duty.
It has adjusted the specific rates of excise duty by 6.3 per cent which represents the average inflation rate across 12 months to June 2022.
The adjusted specific rates will become effective on October 1, 2022.
The new rate of excise duty for super petrol is set to stand at Ksh.22,878.60 from the current rate of Ksh.21,953.02 per 1,000 litres of the product.
The rate of excise duty levied on kerosene is meanwhile set to rise from Ksh.11,370.98 to Ksh.12,087.35 after the adjustment.
The inclusion of fuel products in the tax-inflation adjustments is despite an outstanding suit which sought to stop KRA from effecting changes to the rate of excise duty on petrol, diesel and kerosene.
In September last year, the tax man was sued over the adjustments made to the excise duty rate levied on fuel products with the petitioners arguing such a change would be draconian to Kenyan consumers.
KRA has since moved to Supreme Court with view to quash injunctions pausing the inflation adjustment on petroleum.
At the same time, KRA was sued over adjustments in the rate of excise duty on other products on the inadequacy of public participation.
The inclusion of petroleum products for tax adjustments comes three months before KRA’s Commissioner General gets the leeway to pause duty adjustments on specific products.
The 2022 Finance Act amended the Excise Duty Act-inflation adjustment provision which empowered the Commissioner General by notice in the Gazette with approval of the Treasury Cabinet Secretary, to exempt specified products from inflation adjustment after considering circumstances prevailing economy in the period/year.
KRA is widely expected to apply the provision in pausing adjustments of excise duty on crucial items such as petroleum when the amendment kicks in on January 1, 2023.
Adjustments to the rate of excise duty on petroleum products would escalate the prices of fuel at the pump in spite of the costs already standing at a premium.
KRA has invited public comments on the expected adjustments which are to be submitted via email on or before September 16.
Other products set for the excise duty adjustments include SIM cards, motorcycles, cigarettes, wines & spirits, beer, fruit juices, bottled water and sweets.