Kenyan President Proposes Electricity Tax Cut

Kenyan President Mwai Kibaki has proposed a Value Added Tax (VAT) cut that could rein in runaway electricity costs that have threatened investor confidence in the East African country. Local media reports indicate that senior officials at the ministries of finance and energy are already working to implement the proposals, which are aimed to lessen fears of possible job losses, reduced industrial production and planned factory closures after electricity costs rocketed over 20 per cent since July. Although some experts say the tax cut could reduce the lofty power costs by up to 50 per cent, the Kenya Association of Manufacturers has adopted a cautious stance, with chairman Vimal Shah saying they would take a “a wait-and-see” attitude until the cut is actually implemented.[PE]