The Lower Eastern Times Opening The Third Eye
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A decision by Treasury Cabinet Secretary John Mbadi to lower VAT on fuel to 8 per cent is now facing legal scrutiny.
In a gazette notice issued on April 15, Mbadi reduced VAT from 13 per cent to 8 per cent—just a day after an earlier cut from 16 per cent to 13 per cent. Following this move, the Energy and Petroleum Regulatory Authority (EPRA) announced a drop in fuel prices, with petrol and diesel becoming cheaper in Nairobi.
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However, concerns have emerged that the CS may have exceeded his legal mandate. The law only permits adjustments of up to 25 per cent of the existing VAT rate without parliamentary approval.
Mbadi’s action came shortly after William Ruto publicly directed a VAT reduction during a rally in Kisii, but lawmakers argue such a significant cut requires Parliament’s approval.
Borabu MP Patrick Osero pointed out that reducing VAT from 16 per cent to 8 per cent goes beyond what the law allows without legislative backing. Under the VAT Act, the Treasury CS can only lower the rate to about 12 per cent within the 25 per cent limit.
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The law also requires any such changes to be presented to the National Assembly promptly, where MPs must approve or reject them within 21 days for them to remain valid.
Meanwhile, Molo MP Kimani Kuria acknowledged the legal concerns but noted that Parliament could still step in to regularise the changes.
