Why MPs rejected Epra plan to hike taxes

The government has been dealt a major blow after Members of Parliament rejected a proposal that could have seen levies collected by the Energy and Petroleum Regulatory Authority (Epra) increase from the current 0.5 percent to 1 percent.

The proposals, which were contained in the Energy Act, 2019, were rejected by the House this week during the consideration of the (Miscellaneous Amendment) Bill.

In rejecting the proposals, MPs argued that the public was already struggling with high energy costs and that an increase in the levy would have a direct impact on consumers.

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If the proposed amendments had gone through, the levies collected by Epra on electricity and petroleum could have doubled, a cost that would have been borne by consumers.

Chairperson of the Energy Committee, Vincent Kawaya (Mwala), rallied his colleagues to reject the amendment, pointing out that the committee was currently conducting investigations into the high cost of electricity in the country and it would be counterproductive to pass the amendments.

“I propose deleting the amendment proposed to Section 20(1). The proposed amendment sought to increase levies on electricity and petroleum by Epra from 0.5 percent to 1 percent. In other words, Epra wanted to double their collections,” Mr Musyoka said.

“We are working to reduce the cost of energy, not increase it,” Mr Kawaya told the House.

He told Nation.Africa that as a committee, members read mischief on the proposal, saying Epra did not only want to double the levies but also wanted the money collected to be exempted from the consolidated account.

“This means that the money collected cannot be subjected to accountability. It also makes it difficult to monitor the levies collected because it is not directly from the exchequer,” Mr Musyoka said.

Read: Bill seeks to strip EPRA role of setting petrol prices

Mathare MP Anthony Oluoch supported the rejection of the amendment and said Kenya has already lost investors to neighbouring countries with lower electricity costs.

“High cost of electricity hinders economic growth and discourages investment. Investors are moving to neighbouring countries with lower electricity costs,” Mr Oluoch said.

Funyula MP Wilberforce Oundo supported rejection of the proposed amendment, saying the cost of electricity in Kenya is already high.

Marakwet East MP Kangongo Bowen argued that it is not the right time to increase the cost. “I support the deletion of this amendment. As a country, we are looking at measures to reduce the cost of electricity for our people,” he said.

However, Epra received a boost after lawmakers approved an amendment to the Energy Act that will give it the power to regulate crude oil.

MPs argued that the move was to encourage ongoing exploration and production activities in Turkana County.

“We are going to have our own crude oil. Again, regulation does not necessarily mean we are using crude oil ourselves,” Mr Kawaya said.

“We will also likely have potential customers who want to use our transit lines – our pipelines – to transport their crude oil. In this regard, there must be some form of regulation for any crude oil arriving in the country.”

In a bid to deter vandalism and stealing of energy infrastructure, the lawmakers called for stricter penalties for the offence.

“We need to send a strong message to those who steal energy infrastructure,” said Teso South MP Mary Emaase. “This is a very serious offence and thieves must be punished.”

smundu@kenationmedia.com

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