The economic impact of high electricity costs in Kenya has seen the government opt to get rid of Value Added Tax from mass fuel used for power production.
The move from the President to the two ministries to review taxes on power generation came in the course of reports of job losses, reduced production and impending factory closures. Experts believe the move could cut electricity costs by as much as 50 per cent.
Top civil servants in the ministries of Finance and Energy gathered on Monday to put final touches to the tax proposal as ardent pleas by both big and small power consumers continued to protest against the huge bills. ‘I am aware that the country is experiencing high cost of energy, especially of electricity. I am now directing the minister for Finance and of Energy to review the taxes and levies in order to reduce the costs of power.’ The president was quoted.
Power bills have rocketed since July mainly because of the high cost of fuel used by power-generating firms and the Kenya Association of Manufacturers, hoteliers and domestic consumers have been campaigning against the high cost of electricity generated by the high cost of fuel.
Elimination of the VAT will considerably bring down the mass fuel cost, with some economic professionals putting the drop by as much as 50 per cent. Locals believe that the President’s ruling is good and timely. ‘We know the fuel and electricity power suppliers have justifiable costs but the thing is, we just can’t afford it.’ A Kenyan power consumer said.