MPs pass housing levy, increase VAT on fuel

By Peter Ochieng

Members of Parliament (MPs) on Wednesday night voted to pass two key clauses in the finance bill, 2023.

The MPs passed the 1.5 per cent housing levy, which means from 1st July, 2023, employees will be deducted 1.5 per cent of their salaries to go into the housing fund kitty.

Employers will match up their employees contributions with a similar 1.5 per cent.

184 MPs, aligned to the ruling Kenya Kwanza Alliance voted in support of the housing tax, while 72, majorly from the Azimio opposed it.

On the fuel front, MPs voted to increase the Value Added Tax (VAT) on petroleum products from the current 8 to 16 per cent. 184 MPs voted in favour of the increase, while 84 opposed the amendment.

The vote came after a heated debate on the floor of the House. Githunguri MP Gathoni Wamuchomba, despite having been elected on the ruling UDA party ticket, opposed the amendment.

“Life is unbearable as we speak to our citizens. We cannot afford to add more levy on fuel because fuel is a catalyst of everything from production to marketing and to the welfare of our people," she said.

Right now our people are suffering and production, especially in our rural areas is going to go to zero if we add tax on fuel,” she added.

With the amendment having gone through the National Assembly, fuel prices are expected to increase by at least Sh10 per litre starting next month.