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How new taxes hit Kenyans where it hurts most

By Standard Team | Published Mon, September 3rd 2018 at 00:00, Updated September 2nd 2018 at 20:44 GMT +3

Consumers, motorists and commuters have started feeling the devastating effects of the increased cost of fuel.

ALSO READ: What you should know about the tax you pay

The increase was greeted by condemnation, even as pressure mounted on President Uhuru Kenyatta to reverse the high prices.

The Orange Democratic Movement yesterday gave Treasury Cabinet Secretary Henry Rotich 72 hours to reconsider the 16 per cent tax on petroleum products or face impeachment.

Led by Mathare MP Anthony Oluoch, the lawmakers said the new tax hike would further suppress Kenyans who were already overburdened. “The new tax measure will lead to high commodities prices and transport cost,” the MPs said.

Bomet Central MP Ronald Tonui said Mr Rotich was courting impeachment by defying Parliament on new taxes on petroleum. Mr Tonui said the CS should prepare to bear the consequences of forcing heavy prices on Kenyans despite Parliament’s intervention.

Meanwhile, operators in the public transport sector across Nakuru County are expected to hold a demonstration today following the introduction of 16 per cent Value Added Tax on petroleum products.

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Various associations of Matatu operators issued a notice to hold demonstrations in Nakuru town in protest against the increment. This is expected to paralyse transport in the town and along the Nairobi-Eldoret Highway.

Spot checks by The Standard in various counties yesterday revealed that some matatu operators hiked fares, some by up to Sh500, in reaction to the higher pump prices. A litre of petrol is now retailing at Sh130 while the same measure of diesel goes for Sh117.

Heaviest burden

ALSO READ: Do away with new tax on fuel; it'll cause much pain than gain

At the same time, business groups, led by the Kenya Association of Manufacturers, warned that retailers would be hard hit, with the heaviest burden borne by the poorest demographic (see separate story).

While in some areas the fares had shot up because of high number of travellers due to reopening of schools, and had been expected to come down, the new development certainly means commuters should not expect any relief.

Operators who had not reviewed their prices said there were few commuters yesterday, while others said they were waiting for official communication from management of their saccos. In Nairobi, fares for vehicles heading upcountry had increased substantially.

Most shuttles at Ronald Ngala street that head to Western Kenya had by yesterday increased fares by Sh200.

“Initially, we used to charge Sh1,000 to Kisumu and Kakamega but with the increase in fuel prices, we are now charging Sh1,200,” said Fredrick Ochieng’, who works with Sasaline Shuttle.

At Machakos Country Bus station, the average fare to Western had been Sh500, but this has shot to Sh700.

“In the past we allowed fares as low as Sh500 or Sh600 to Western Kenya. However, from today (yesterday) the least fare one will be required to pay is Sh700,” said Ben Oluchina, who operates the Climax Buses from Nairobi to Butere.

ALSO READ: How fuel tax will hit you after lawmakers' bid to save consumers flops

To go to Butere on this bus, one will be required to pay Sh1,000. He said in the past passengers paid Sh500 to Kapsabet, but the fare was set to double.

Matatu Owners Association Chairman Simon Kimutai had earlier announced that fares in Nairobi would increase by between Sh10 and Sh30.

In Kitale town, PSV operators hiked fares by nearly 60 per cent.

Fare from Kitale to Lodwar rose from Sh2,500 to Sh3,000 for shuttles while buses charged between Sh1,500 and Sh1,800. 

Delivered maize 

In kakamega, some matatu operators increased fares by 15 per cent or Sh50.

“We have decided to increase our charges by 15 per cent to counter the fuel prices. All stages out of Kakamega have increased fare by Sh50,” said Shadrach Kipkoech of Blue line sacco. In Busia, matatus plying Busia-Kisumu route were charging passengers Sh350 up from Sh300. Moffat Ouma, a driver, said from today they would be charging Sh400.

“We have no other option but to hike fares because the price of fuel has gone up drastically,” said Mr Ouma. From Busia to Mumias, the fare rose to Sh200, up from Sh150 while to Bungoma commuters were charged Sh300 up from Sh250. 

“Today many people are not travelling but tomorrow we shall hike the fares,” a driver who plies Busia-Mumias route told The Standard yesterday.

ALSO READ: By insisting on fuel tax, Rotich is out of touch with public’s mood

In the North Rift, farmers, who are yet to be paid for maize delivered to the National Cereals and Produce Board because of a scandal, termed the increment as a slap in the face.

According to the farmers, ploughing an acre costs between Sh2,500 and Sh3,000, but the additional fuel prices will inevitably lead to higher costs.

“With rising fuel prices it is not going to be easy sustaining farming. We feel frustrated by the Government’s actions,” lamented Job Tallam, a maize farmer in Kobos. 

At the Coast, owners of transport companies warned of an increase in bus fares this week.

Coast Bus official Ahmed Awadh said the company had not made any changes in the fares. He said the high fares were due to the usual rush, as schools reopened.

“The fare from Mombasa to Kisumu is now Sh2,000, but will fall to Sh1,800 mid this week when the rush will be over,” said Mr Awadh.

Executive Chania official Eunice Wanjiku said they had increased the fares between Mombasa and Wote to Sh1,200 from Sh1,000 because of the rush to schools.

“We have many people travelling to Machakos, Makueni, Kitui and Nairobi because of the rush, but we expect this to go down,” said Ms Wanjiku.

ALSO READ: Use of KRA pin could boost the economy

Modern Coast official Hamisi Sumra said the company would be forced to increase fares. 

In Kakamega, matatu operators vowed to protest the high fuel prices in the streets today. 

[Reporting by Anyango Otieno, Kevine Omollo, Titus Too, Osinde Obare, Bakari Ang’ela, Willis Oketch, Patrick Beja, Kennedy Gachuhi, David Mwaura and Ignatius Odanga]


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