Halving of cooking gas tax heralds huge benefits

The move by the National Treasury to halve value-added tax (VAT) on cooking gas from 16 per cent to eight per cent and revive a subsidy scheme in a bid to make the product more widely affordable could the best news most Kenyans have heard in a long time.

Cooking gas, also known as liquefied petroleum gas (LPG), the second-most popular cooking fuel in the country, with 23.9 per cent of households using it, behind firewood, which is used by 55.1 per cent. It had, however, become almost unaffordable to many Kenyans due to high taxes levied on it, restricting its usage to a few well-to-do families.

Kibaki-era Finance minister David Mwiraria had removed tax on cooking gas, which won global accolades for Kenya from environmentalists and health enthusiasts, among others. Then that was reversed by the Jubilee Administration, which increasingly loaded VAT to the commodity to very high rates. The result was highly priced cooking gas, hence unaffordable to many people.

The contrast is that it is the same government which has been increasing tax on LPG that claims to champion clean energy, climate change mitigation and environmental conservation. Yet unaffordable cooking gas leads to increased consumption of wood fuels such as firewood and charcoal and ‘dirty’ petroleum energy sources like kerosene by households for cooking.

The government also claims to be concerned about public health yet smoke from cooking stoves that use wood, charcoal or kerosene are responsible for many cases of respiratory diseases, often leading to deaths. This is especially common in rural areas and informal urban settlements, whose residents cannot afford the pricier clean cooking fuels, such as LPG.

The Treasury’s move, coupled with plans to revive a subsidy scheme for LPG, heralds huge economic, climatic and health benefits to Kenyans across the social strata and should be enhanced with the view to ultimately removing taxes on cooking gas and all other sources of clean energy.