Small Fuel Dealers Cry Foul Over KRA’s New VAT System Rollout

The United Energy and Petroleum Dealers Association (UNEPEA) has sounded the alarm over the Kenya Revenue Authority’s (KRA) planned rollout of a new VAT monitoring system for petrol stations, terming it financially oppressive and potentially devastating for small-scale fuel dealers.

Speaking to the press, UNEPEA Chairperson Irine Kimathi criticized KRA for failing to provide feedback following a one-year pilot phase of the system. Dealers were recently issued a notice requiring full implementation by June 30th without public participation on the pilot’s findings.

“At face value, the idea of linking fuel stations to KRA to track VAT remittance seems sound,” said Kimathi. “But the cost and logistics are unworkable.” According to UNEPEA, the new system demands upfront installation fees exceeding KSh 400,000 per station regardless of size alongside annual maintenance costs of KSh 25,000–35,000.

Kimathi warned that these expenses will drive small, rural dealers out of business, threatening fuel access in remote areas. “When the small dealers shut down, fuel will still be sold just not from regulated pumps. We’ll see jerrycans, house storage, and with that, increased fire risks and fuel adulteration.”

She noted that small stations already grapple with tight EPRA-regulated margins and mounting compliance costs including NEMA, NHIF, county levies, and others. “Every year, a new cost is introduced. We’re being pushed beyond our limit.”

UNEPEA is demanding full disclosure from KRA on the pilot’s scope and results, and urging government agencies to adopt a more collaborative, affordable, and transparent approach.

“If the government truly wants compliance, let them deduct VAT from the depot directly and invest in their own tracking systems,” Kimathi said. “Otherwise, they’re pushing grassroots entrepreneurs into extinction.”She added.