President William Ruto has defended his decision to increase the VAT on petroleum products from 8 per cent to 16 per cent.
The President said he intends to raise Sh50 billion from the enhanced VAT on petroleum products.
"The 8 per cent will give us Sh50 billion to deal with roads across the country," he said during an interview with major TV stations at State House on Sunday evening.
The President said the move is important to seal loopholes being exploited by businessmen to deny the country the much-needed revenue.
"Because of the differential rates, that poses a problem on integrity, it was used by people as a loophole to manipulate numbers, the advise I got was that we must eliminate this loophole people are exploiting," he said.
The President insisted that he is better informed and he is making the right decisions for the country including reducing borrowing.
He said the government's decision to suspend payments for imported petroleum products for six months has helped the country build its dollar reserves.
"The first thing was to reinstate the interbank Forex market, the spread that was between 12 and 15 per cent has shrunk between 2 and 3 shillings," Ruto said.
The President said when he was sworn in, the oil marketers were at State House demanding Sh65 in subsidy arrears.
"They told me they were running out of fuel, the government subsidy money and the subsidy was increasing at Sh15 billion a month," he said.
The President said he has done away with a couple of taxes in the proposed 2023/24 budget that will reduce the pain on Kenyans.
"I will make the right decision for the country," he said.
"I have removed taxes on the same fuel, I have removed 3 and a half per cent road development levy from fuel, I have removed VAT of eight per cent on gas about 14 other taxes."
