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In 1960, vehicles in Kenya ran on untaxed light diesel

Cars crossing Mtwapa bridge at the Mtwapa Creek, Mombasa, June 24, 1958. [File, Standard]

Kenyans have in the last few days lamented on skyrocketing fuel prices. Online jokes riding on the issue keep surfacing by the day.

Some have suggested that a young man seeking to propose to a lady should bring a litre of petrol in the place of a ring. Crafty and manipulated images of a man buying some fuel in a baby feeding bottle have flooded online forums as do those of a man sniffing some fuel in a petrol station for a small fee!

At the centre of the high fuel prices is the never-ending issue of taxation. Fuel presents easy pickings for a government keen to shore up revenue shortfalls. But while the issue of taxing fuel in Kenya has been a thorny one in recent times, there were days when some forms of fuel were tax exempt.

According to the 1960/61 revenue estimates presented to the Legislative Council by Finance and Development minister Mr K W S MacKenzie on April 27, 1960, Kenya had 78,000 vehicles and motor vehicles, and majority used untaxed light diesel fuel. By comparison, Nairobi alone will have 1.35 million vehicles by 2030. In 1960, the customs duty tax on petrol was 75 cents to a gallon (approximately 3.7 litres). Consumption tax on the same amount of petrol was 32 cents a gallon.

For suffering Kenyans, it is worth noting that in 1960, the price of fuel was Sh3.60 and Sh2.18 per gallon of petrol and light diesel, respectively. However, while the number of vehicles had increased by 15 per cent between 1957 and 1959, the government was losing out on tax revenue as more vehicles ran on untaxed light diesel. The minister lamented that though there were more heavier vehicles on the road, “there was no compensation on wear and tear on our roads.”

To remedy the problem, he proposed a 75 cents customs duty tax and a 35 cents consumption tax while raising taxation on petrol by three cents. MacKenzie was keen not to upset the populace, more so the settler community that owned most of the transport business in the country. “I am advised that the rise in vehicle licence fees and the increase of the three cents in the petrol consumption tax will have a negligible effect on consumers,” said MacKenzie.

Back then, as the minister reiterated, Kenyans were proud to pay their taxes and “made it once more possible for us to stand on our own feet. If this is done, and only if this is done, we shall be able to provide all our people with more of the social and other benefits to which they naturally aspire, given cool heads, stout hearts, hard sinews…and slow tongues.”