Cost of Power –The Treasury wants certain levies on electricity to be reviewed downwards so that to help reduce the cost of power in the country.
While appearing before the Parliamentary Committee on Energy which is led by Mwala Member of Parliament MP Vincent Musyoka yesterday Tuesday October 24, Treasury Cabinet Secretary Njuguna Ndung’u highlighted measures that could see a reduced cost of power for consumers.
Among the reviews he listed in his recommendations include the Water Resource Management Authority (WARMA) Levy, the Energy Regulatory Commission (ERC) Levy and the Rural Electrification Program (REP) Levy.
These levies are usually charged on power consumers and released to different State agencies to help in the implementation of various development programmes.
The CS, however, maintained that the 16 percent Value Added Tax VAT on power cannot be touched as of now.
He appeared to openly differ with the regulators who want the 16 percent reviewed back to the previous 8 percent.
“Members of the Energy were also concerned about the various taxation measures and levies impacting on the overall cost of power and how the same can be managed to offer relief to Kenyans.
“In his response, Ndung’u informed the Committee that the only national tax charged on electricity is VAT at the rate of 16% and that removal of the same will introduce discrimination in the VAT tax regime,” Committee chairman MP Musyoka explained.
CS Ndung’u added that the review of the levies could soon see Kenyans pay less for electricity and, in the long run, attract investors from around the globe.
Current rates of electricity sees sh 24 VAT charged from a token purchase of sh 200; as sh 6.23 is directed to the Rural Electrification Program REP Levy, and sh 0.1 to the Water Resource Management Authority (WARMA) Levy.
The Treasury CS spared some time to challenge the government to work on ways to stabilise power amid regular outages.
