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Reprieve as Parliament suspends 16 per cent VAT on fuel

Parliament on Wednesday afternoon voted to suspend by two more years the introduction of 16% tax on petroleum products that was to come into effect on Saturday September 1, 2018.

The move effectively shielded poor household from a spike in the cost of living.

The mover of the motion Minority Whip Junet Mohammed argued that the introduction of VAT on petroleum products would at the touch of a button trigger tremendous rise in the cost of commodities and transport.

“This House has been accused of not being sensitive to the need of the people. It is time we side with them and I plead that we postpone this tax to 2020,” Junet said on the floor of the House.

PETROLEUM PRODUCTS

After the suspension of the bill, the National Assembly in its official Twitter account posted:

“The House has this afternoon approved an amendment to Clause 18 of the Finance Bill, 2018 sponsored by Minority Whip Junet Mohammed suspending the implementation of 16% VAT on fuel, which was to take effect on 1st Sept 2018 for a period of 2 years citing the high cost of living.”

VAT on petroleum products was introduced in the VAT Act 2013 but was deferred for a period of three years.

The deferral was further extended for a period of two years which is set to expire on September 1, 2018.