LPG gas prices set to rise after KRA reviews levies

Key points

  • LPG gas is set to rise as KRA rethinks the tax portion.
  • Snarl-up at Namanga as LPG traders denied clearance certificates by KRA. 

The snarl-up of trucks transporting cooking gas at the Namanga border appears endless after the taxman stated that clearance certificates would not be issued until traders paid the requisite levies.

According to the Kenya Revenue Authority (KRA), traders have been underpaying taxes. Trucks transporting liquefied petroleum gas (LPG) from Tanzania have been held up at the Namanga One-Stop Border Post (OSBP) since last week due to a dispute with KRA.

“The dealers have paid taxes, but these are not the taxes that they are obligated to pay under the law.” “We have sent them the assessed taxes, but sadly, none of them have paid,” said Joseph Kaguru, Deputy Commissioner of Revenue and Regional Coordination at the KRA, on Friday morning.

Furthermore, Mr. Kaguru accused the dealers of paying reduced taxes based on false assertions that the gas originated in Tanzania while being shipped from the Middle East.

To cut prices and boost the use of clean fuel, a 16 percent value-added tax (VAT) was reintroduced in July last year after being zero-rated in June 2016.

Unlike other petroleum products, LPG gas prices depend on supply and demand.

Prices are projected to rise higher as a result of supply disruptions caused by global geopolitical and supply chain issues.

The snarl-up might further impede the clearance of perishable supplies from Tanzania, emphasizing the negative consequences of the standoff.

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