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{
    "id": 1116834,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/1116834/?format=api",
    "text_counter": 206,
    "type": "speech",
    "speaker_name": "Homa Bay CWR, ODM",
    "speaker_title": "Hon. (Ms.) Gladys Wanga",
    "speaker": {
        "id": 590,
        "legal_name": "Gladys Atieno Nyasuna",
        "slug": "gladys-atieno-nyasuna"
    },
    "content": "rising global prices of crude oil has led to a sharp increase in the cost of petrol at the pump. This must be noted because people might ask why it was too low recently and too high right now. I also want that to be noted. It is also because COVID-19 had resulted into very low or shut down of activities globally but, now, activities have begun to rise. It is also important to note that there is almost a 50 to 50 share between landing cost and taxes and levies as I have listed them. It is for this House to wonder whether it makes sense that there is a 50 to 50 share of landing cost and taxes and levies per litre of fuel. I would like to state that the Committee reviewed these issues one by one and covered all the issues that were raised within the Petition. We reviewed all the taxes and levies individually and we have made a raft of recommendations. I just want to give a sneak preview of those recommendations before I go through them one by one as to how we got to them and how we are moving forward with them. At this point, I would like to mention that if this House approves this Report with the recommendations that have been made by the Departmental Committee on Finance and National Planning, we are likely to reduce the pump price of fuel by approximately Kshs12 per litre. The proposals we have made, from the outset, will also result in a loss in revenue, for instance, a reduction of Kshs22 billion to Kshs4.6 billion of VAT on liquefied petroleum gas (LPG). The other loss is in the Petroleum Development Levy of Kshs11 billion. The first recommendation we have made is a reduction of VAT by 50 per cent from the current 8 per cent to 4 per cent. The second one is a reduction of the Petroleum Development Levy from the current Kshs5.40 to Kshs2.50. The third one is a freeze on inflation adjustment on any fuel and fuel products. Those are some of the recommendations among several others that will ensure that the consumer is protected. The Petroleum Development Levy, up to June last year, was Kshs0.40 per litre. After June last year, it was increased to Kshs5.40. The Committee noted that this increase was too steep to be increased at once. That is why the recommendation was made to revise it downwards so that it increases gradually. However, even before our Committee’s Report is adopted, I have seen that the Select Committee on Delegated Legislation has annulled the entire regulation that puts in place the Petroleum Development Levy that was fixing the Petroleum Development Levy on diesel and has proposed amendments to it. That means, right now, Petroleum Development Levy on diesel hangs in the balance because the House, just now, by voting, has annulled that Regulation. Hon. Speaker, one of the things the Committee noted and Members had also noted here during debate is that this Regulation that was increasing Petroleum Development Levy from 40 cents to Kshs5.40 was done by this House but it did not really come from the Floor of this House because it was done at the Committee on Delegated Legislation. The Statutory Instruments Act states that if the Committee on Delegated Legislation is approving a Regulation, then there is no need for it to come to the Floor of the House. This does not work well for the House. Therefore, the Departmental Committee on Finance and National Planning is proposing that any legal instrument that relates to taxes or levies must be brought to the Floor of the House whether it is accepted or annulled by the Committee on Delegated Legislation. That way, the whole House can take responsibility for whatever increases or reductions we make to our taxes and levies. The other key issue was on application of the Petroleum Development Levy. After we increased the Petroleum Development Levy from 40 cents to Ksh5.40, Ksh25 billion was collected in the last financial year. Therefore, the expectation was that now that the global prices were increasing, there would be money available for stabilisation. But when we asked why the prices were not stabilised in the month of September as it had been in the months of July and August, the The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor."
}