The Government has removed tax on cooking gas to increase the number of Kenyans using clean energy and to reduce the cost of living.
The move comes after President Uhuru Kenyatta assented to the Finance Bill 2016, which also expands income tax brackets by 10 per cent and regulates taxation measures in gaming and betting industry.
Other major amendments in the Finance Act, 2016 include the removal of excise duty on locally assembled motor vehicles and motor cycles to promote assembly, and tax amnesty for taxpayers who have investments outside Kenya to reinvest back home.
Cooking gas is commonly used in urban areas, with Nairobi accounting for 60 per cent of the market and Mombasa 15 per cent while the rest is scattered around other growing urban centres with only one per cent usage in rural areas.
This is driven by low availability of firewood in urban centres, and ease of gas distribution due to the greater population density.
Analysts argue that improvement across the gas value chain need to be made to bring down the cost, create awareness among consumers and increase distribution to reach majority of Kenyans.
The new law also exempts Value Added Tax for park entry fees and tour operator services to promote tourism and reduction of income tax corporate tax rate from 30 per cent to 15 per cent for investors who put up more than 400 residential housing units to promote housing development.
Other amendments include the legal framework for the establishment of the Commodity Exchange Market and exemption of VAT for manufacture of animal feeds inputs.