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More burden to already over taxed motorist as Treasury proposes new toll charges

By Judah Ben-Hur | June 12th 2020
A section of Thika super highway.

Motorists will soon feel the financial heat as new charges in form of toll fees will be paid on major highways across the country.

The new charges which are part of the financial bill 2020 that was tabled at the National Assembly for debate and approval on May 6, 2020, will see motorist pay a fee which is to be set by the Transport Cabinet Secretary. The fee will be set based on the capacity of the car and distance travelled.

However, toll fees are not new to Kenya. It first came to force in 1984 as the Public Roads Toll act as a way to raise money to maintain road networks in the country. The system was blistered with corruption and by the mid-90s it was scrapped off and replaced by road maintenance levy. The levy currently stands at Sh18 per litre of diesel or petrol.  

Even though Most Kenyan roads are funded using tax revenues, criticism has surrounded the new toll system especially from matatu operators who see it as a punishment. Experts have raised alarm against the tax which when implemented, will lead to double taxation as motorists pay the toll fees on top of the fuel levy. 

Speaking during an investor briefing at a Nairobi hotel, Kenya National Highways Authority Director-General Peter Mundia has been quoted saying that the Nairobi-Nakuru-Mau Summit highway, Nairobi-Mombasa highway, and the second bridge in Nyali will be upgraded by private investors who will charge motorists a fee for using the main highways.

Roads that are completed such as Thika superhighway and the Southern Bypass in Nairobi will also come under the management of private investors once the bill is passed to law and tenders are advertised.

According to a source at Kenya National Highways Authority(KeNHA), there is no official date when the toll stations will be set up because the bill is yet to be passed in Parliament. 

According to a KPMG analysis of the Financial Bill 2020, running of the toll stations by private companies will “institute other means of toll collections other than physical payment booths which are associated with traffic jam.”

KeNHA has also commented that there will be different methods of charging toll fees at tollbooths that will include a manual format where motorists stop and pay, an electronic system that uses prepaid cards that can be swiped and a third system in which vehicles may be fitted with tags.

The Bill also removes the requirements for approval by the National Assembly of agreements entered into by the Minister with qualified persons to plan design or manage a public road. Under the new law, the Treasury CS will establish a fund to be known as the National Roads Toll Fund under the Public Finance Management Act, 2012.

The transport sector has been the second-largest benefactor from the 2020/21 budget having received Sh 47.91 billion (Transport), Sh2.51 billion (Shipping and Maritime), Sh17.05 billion (Housing and Urban Development) and Sh3.49 billion (Public Works).

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