Kenya: Pressure Mounts On President Kenyatta Over Fuel Tax

Fuel pump.
3 September 2018

Nairobi — Pressure is mounting on President Uhuru Kenyatta to sign the Finance Bill 2018 that contains amendments suspending the new levy imposed on fuel products.

The 16 per cent fuel tax was imposed by the Treasury on Saturday, despite the amended Bill passed by Parliament that suspended the move for two years.

The Kenya Association of Manufactures has warned that the move will adversely affect President Kenyatta's Big Four agenda and wants it reviewed.

Deputy President William Ruto has however assured that the government will find an amicable solution to save Kenyans.

"There is an outcry that there is something wrong and as the Executive, we shall it down with Parliament so that we can ensure that there is a balance between looking for resources for matters of development but also balancing it with affirmative action to ensure that vulnerable Kenyans are not affected even as we look for taxes and resources to be able to drive our transformation," Ruto said.

Baringo Senator Gideon Moi pointed out that it will push the cost of living higher in an already harsh economic climate.

He stated this will further increase the inflation rate in the country, cause loss of jobs and even slow down the economy.

Commuters have begun feeling the pinch after Public Service Vehicles hiked fares.

In Machakos, passengers were stranded after the fares were increased by nearly 100 per cent from Sh250 to Sh400 on the Machakos-Kitui route.

The situation is similar in Nairobi and Kisumu where fares have been hiked to more than 50 per cent.

According to the Matatu Owners Association (MOA) Chairman Simon Kimutai, the increase was inevitable since the levy imposed will have a huge impact on the sector because of the ripple effect.

Petrol will now cost Sh127.80 per liter in Nairobi from Sh113 per liter while a liter of diesel will now retail at Sh115 and kerosene at Sh97.

Belgut Member of Parliament Nelson Koech has also written to the Speaker of the National Assembly to convene a special sitting to discuss the 16 percent VAT increase on fuel.

In a letter addressed to the Leader of Majority Adan Duale, Koech stated that his decision has been informed by the public outcry and Parliament's amendment of the Finance Bill that differed the VAT on petroleum products by two years.

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