Kenyans will be waiting with bated breath for the results of two cases filed in the High Court to block an additional tax that has triggered higher fuel prices.
In two petitions separately filed against the Government in Nairobi and Kisumu counties yesterday, the petitioners have opposed the 16 per cent Value Added Tax (VAT) on petroleum products that has sparked public outrage.
The tax was first factored in the Finance Act 2013. Implementation was however suspended for three years until 2016, but was again put on hold for another two years, which elapsed on August 31.
Last week, MPs again passed a motion to suspend the tax provision until 2020, but the National Treasury, Kenya Revenue Authority (KRA) and Energy Regulatory Commission (ERC) defied the resolution.
Treasury enacted the new fuel tax measures on September 1 and the ERC adjusted fuel prices upwards.
In the two petitions before the High Court, the petitioners said the increased taxes would lead to a higher cost of living and further punish Kenyans already burdened by heavy taxation.
In Nairobi, activists Okiya Omtatah and Wyclife Nyakina filed an urgent suit seeking the court’s intervention to suspend the new tax.
They said it was insensitive and immoral for the Government to increase fuel prices at a time when the majority of Kenyans were struggling to make ends meet.
“Increase in price of petroleum products is a definite threat to the socio-economic rights of Kenyans. It is also a threat to national security given that 60 per cent of Kenyans depend on petroleum products for industrial and domestic use and the increase in price affects the cost of everything,” said Mr Omtatah.
The activists have accused Treasury Cabinet Secretary Henry Rotich, KRA and ERC of failing to read the public mood and disrespecting Parliament by going ahead to implement the new tax even after MPs voted to suspend it until 2020.
Omtatah said imposing the VAT violated the express provisions of the Constitution, including public participation.
"They failed to take concerns raised by experts and the public that additional taxation on fuel will push up prices of basic commodities and trigger runaway inflation,” said Omtatah.
He argued that Kenya should not bow to pressure from the International Monetary Fund (IMF) to impose the tax on fuel, stating that it amounted to external interference with the country’s affairs.
According to Omtatah, the new tax is tantamount to double taxation
In Kisumu, three residents - Titus Alila, Jackline Otieno and Francis Ogada - sought temporary orders quashing the tax.
The trio, who are also officials of a local youth group, argued that by imposing the new tax, Treasury went against the wishes of Kenyans and ignored the sovereign power of the people.
They accused the Government of violating constitutional values, principles and fundamental rights in the Bill of Rights by imposing the levy.
“The decision is a burden to already overtaxed Kenyans,” read their petition.
[Paul Ogemba, Washington Onyango and Harold Odhiambo]