Kenyans have been warned to expect a hike in matatu fares beginning September by the Matatu Owners Association.
The Association’s Chairman, Simon Kimutai, attributed the expected hike to the government move to introduce 16 percent Value Added Tax (VAT) on fuel products next month.
According to Kimutai, instead of acting on tax evaders, the Government has decided to levy 16 percent tax on fuel products to collect more revenue.
“Additional fares are painful to commuters but the increase in fare prices has to take effect because taxation of fuel translates to an added cost to public service vehicles operators,” he said in a statement.
He, however, assured commuters that the increase will be “reasonable” as it will be based on the calculations of the additional cost.
For town services, the Matatu fares increment is expected to be between Sh.10 and Sh.20 depending on the distance covered, Kimutai said.
The Consumers Federation of Kenya (COFEK) has, however, opposed the increase of levy on fuel products.
“The proposal to add VAT on fuel is driven by the IMF and not the Kenyan Government.
“It does not meet the threshold of Article 10 of the Constitution. If allowed, the move will put the taxation levels on a liter of petrol to a staggering 70percent,” COFEK Secretary General Stephen Mutoro said.
Mutoro further added that should the proposal be implemented, the cost of transport will radically rise leading to inflation of other products.
“Our plea, therefore, is that the proposal is immediately put on hold to allow further stakeholders consultations,” he said in the statement.
The Consumer Federation has threatened to seek legal redress should the Government ignore their pleas and carry on with the implementation of the tax levy.