Cost of Living: NADCO Fails to Agree on Reduction of Fuel VAT, Scrapping of Housing Levy

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The National Dialogue Committee (NADCO) has failed to reach a consensus on a number of proposals on
lowering the cost of living, including a reduction of VAT on fuel from 16% to 8%, and scrapping of the housing levy, the twin issues in the Finance Act 2023.

This is according to the committee’s report released on Saturday, following a conclusion of the talks between the Government and the Opposition.

Azimio Coalition had insisted on a reduction of fuel VAT from 16% to 8% and also called on President Ruto’s administration to scrap the Housing Levy.

However, NADCO struck a deal on a number of issues especially on government spending, where it recommended that all arms of government reduce their travel budgets by 50% and that the Salaries and Remuneration Commission review Daily Subsistence Allowances for State and Public Officers with a view to reducing by 30%.

The committee proposed the Ministry of Energy and Petroleum in liaison with the National Treasury reduce the road maintenance levy and the anti-adulteration levy by Sh 5 and Sh 3 per liter respectively.

In addition, NADCO has recommended that the National Government finalize the transfer of all
devolved functions and provides for the concomitant resources to the county governments.

It has also asked Parliament to amend the Constitution to provide for the equitable share to the County Governments not to be less than 20% of all revenue collected by the National Government from the current 15%.

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