Kenya’s economy may be seriously hurt if palliatives are not created by the government for businesses following the implementation of the newly introduced 16% sales tax on all petroleum products in the country.
Already, a crippling fuel shortage crisis had been triggered in the country, resulting in long queues at petrol stations, is a result of a protest against the price hike by the fuel marketers.
Following the protest by the distributors, the Kenyan Government has reacted by revoking the licence of the Kenya Independent Petroleum Distributors Association (KIPDA) for allegedly championing the fuel boycott, describing the association members’ action as tantamount to economic sabotage.
It would be recalled that the Kenyan Parliament had approved the tax in 2013 but government, based on comprehensive assessment of the impact of its implementation, has been shifting the implementation.
Although some distributors and other stakeholders had challenged the legality of the new tax regimes in the court, however, a High Court on Tuesday refused to suspend the implementation of the new tax hike despite the public outcry against it.
Analysts are forecasting that Kenyan President, Uhuru Kenyatta, may suspend the implementation of the tax on his return from his current trip to China, where he attended the just ended Forum for Africa-China Cooperation (FOCAC) Summit in Beijing.
