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Motorists Association of Kenya

P.O BOX 8120-00200

Tel: 0723 779950

Email:

info@motoristassociationofkenya.com

Web:

www.motoristassociationofkenya.com

 

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PROTEST AGAINST BRUTAL 16 PERCENT VALUE ADDED TAX ON FUEL

We at motorist Association of Kenya strongly oppose the government plan to charge 16 percent value-added tax (VAT) per litre on fuel. The move to raise pump prices to a record Sh130.15 per litre is brutal as it will swindle we who drive our hard earned money. MAK has, therefore, resolved to resist the injurious action in any way possible. A date for countrywide protest will be announced soon once we agree with all those to be affected. Vehicle owners consume a combined 15Million litres of petrol and diesel daily. This means the harsh price increase of Sh17.9 per will rob motorists a whopping 268.5 Million on daily basis.

 The Treasury principal secretary Kamau Thugge and CS Rotich must not be allowed to sell Kenyans birthright to International Monetary Fund (IMF). We know politics were played to dupe us to vote first by postponing the VAT in 2016. If the rip off is effected, the economy will collapse since transport of goods and persons is so important. Increasing diesel used to power trucks, buses, tractors and petrol use by the middle class is the most callous move by the CS.

The new tax will badly burden the already heavily taxed vehicle owners. Tax on one litre alone will amount to Ksh 70 per every litre, the highest anywhere on earth.

Targeting motorists alone every time to fill government deficit and wastage is the worst form of discrimination. To be fair Kenya Revenue Authority should raise the tax to all Kenyans not one section of marginalized Kenyans every time, punished only on the basis of owning a vehicle.  Sh71 billion a year treasury target is not true since true calculation show missing Sh27 002 500 000. Based on daily consumption the actual figure is Ksh 98 002 500 000, not Sh 71 billion.

Motorists will resist in a big way this ulterior move targeting them by The IMF in collusion with the treasury. Dictating terms to Kenya to do away with tax exemptions is not a preserve of the bank. It is immoral to subject fuel consumers to reduce budget deficits or paying of the national debt pile-ups. If IMF wants to grow revenues it should not target one section of Kenyans just because they are driving they should aim at all, not vehicle owners who use their vehicles for convenience and business as opposed to the assumption that vehicles ownership is a sinful luxury. The treasurer is not sincere here. 

Kenyan motorists continue to suffer a raw deal despite them being the top taxpayers. Recently we were denied benefits of low global oil prices by this same government and road maintenance especially of earth roads is so poor despite the 2017 doubling of road maintenance levy to a whopping sh18 per litre.

High fuel prices are counterproductive since they cause a general rise in prices of essential commodity goods across the board. Big Four socio-economic rhetoric and such excuses notwithstanding, transport of goods and persons should not be a gamble by some government official and a foreign bank lest we want to collapse the fragile economy. Already fuel prices are too high after wily calculated increase immediately done after the general elections. Kenyans are not fools to see the systematic increase in every monthly review to prohibitive Sh112 for petrol and Sh 97 for diesel. After outcry exposed electricity scandal, the easy target now is the accepting middle-class vehicle owner who uses the car for convenience. As seen in a report, Dr Thugge callously downplaying the disastrous impact of the new tax saying that producers will claim “Input VAT” shows disregard to the helpless consumer motorists. Scheming with  VAT-registered taxpayers to make more out of their profit margins as seen in his comments on Business Daily is the most unfortunate thing coming from a state office. “VAT will, therefore, lower their cost base and as such, they should be able to retain reasonable margins on petroleum pump prices,” He was reported saying. All this at whose cost? We can’t allow this arrangement! As motorists, we know the government is giving other consumers reprieve while heaving their burdens on the longsuffering oppressed motorist. A good example is the liquefied petroleum gas (LPG), which has been zero-rated and spared the VAT, to help cushion consumers from higher energy costs, unlike the vehicle owner. Discrimination is an understatement.

It is very subjective since “Other items that have a direct impact on the livelihoods of ordinary mwananchi remain zero-rated,” Dr. Thugge said, citing bread, milk, and medicines to quote the BD report.

“Kenya in 2015 entered a binding agreement with the IMF to charge VAT on fuel and had Treasury officials write a letter of commitment a week before the fund approved a $688.3 million (Sh69 billion) standby loan.” end of quote.  Motorists can easily do a Harambee to raise the Sh 69 billion given as the excuse to introduce VAT by IMF in 2015. That is a very small loan to subject us to this torment. The signing parties are just not being sincere. Motorists are going to sign a petition demanding the Treasury secretary Henry Rotich to rescind this foul policy or face the wrath of Kenyan vehicle owners.

 Kenya should not be sold just to get some a precautionary loan.

Our past experience with IMF during tough structural adjustments is still fresh in our minds. They should give us break by keeping off Kenya as they did during Kibaki Administration. We can do without their coaxing.

Action. Motorists will stage a demo on a date to be given.
Motorists will sign a petition to president, parliament, and treasury

Motorists will tie a yellow ribbon on their vehicles and stick protest stickers during the period of the protest.
Vehicle owners will take legal action
Motorists will seek MP’s support in their constituencies.

Our Contacts

Motorists Association of Kenya

P.O BOX 8120-00200

Tel: 0723 779950

Email: info@motoristassociationofkenya.com

Web: www.motoristassociationofkenya.com

 

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