Kenya: IMF Fuel Tax Is Degrading Kenya's Dignity

Fuel pump.
2 September 2018

After all the posturing and grandstanding over the fuel tax in Parliament last week, commuters and motorists woke up on Saturday to higher bus fares and more pain at the pump anyway.

Treasury Cabinet Secretary Henry Rotich even took time to clear any lingering doubts about the government's resolve to collect the 16 per cent VAT on petrol, diesel and kerosene, releasing a statement late on Friday to that effect.

Consumer and industry lobbies spared no effort to demonstrate how bad charging more levies on fuel will be for the economy in terms of heavy household budgets, high production costs, uncompetitive goods and job losses.

PUBLIC DEBT

Their warnings that the government actually risks ending up without the revenue it desires after the economy slows down have fallen on deaf ears. In the coming weeks, public debate on the controversial fuel tax will, without a doubt, focus on the government's unresponsiveness to the concerns of its citizens and the country's economic needs.

Yet the back story suggests there should be even much bigger concerns for Kenyans. The fuel tax is less about the economy and more about the eroded dignity of a country sinking in public debt, its failing accountability institutions and its helpless citizens.

GHOST COMPANIES

Last year, the Treasury did the unthinkable thing of making payments to one of the ghost companies involved in the controversial Anglo Leasing contracts because it was desperate to unlock the Eurobond cash. The sense of despair in the fuel tax saga is just as dumbfounding. The government has found itself helpless to stop collecting the tax because it gave a commitment to the International Monetary Fund (IMF), which imposed it as a condition for a loan.

So helpless, it has decided to throw all accountability obligations out the window by disregarding the parliamentary vote on Wednesday delaying the implementation of the tax by a further two years.

The more conscientious of the so-called representatives of the people will probably feel embarrassed that they were just as helpless as everyone else to stop the government from levying the tax. But they should have seen it coming from a government they have only been too willing to indulge in the past.

IMPEACHING CS

The 2010 Constitution created a fairly independent and powerful Parliament to check the excesses of the Executive and protect public interest. But MPs, stuck with their old habits of owing loyalty more to the President or the majority party leader than their voters, have chosen to subvert the Constitution and turned Parliament into an appendage of the Executive.

When you see the government moving to so blatantly disregard the decision of Parliament, it is because it knows too well it has a critical number of stooges in there.

If in doubt, just wait until one day an MP suggests impeaching the Treasury minister for going against Parliament and see his or her colleagues come out in their true colours.

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