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Matatu fares to increase from this date

The Matatu owners have explained the reasons for the increase.

Mr Kimutai explained in a statement that the new increase is set to counter the new tariff on fuel, which would see petrol retail at over Sh130 per liter (in Nairobi), the highest amount witnessed at the pump in the recent past.

“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,” Mr Kimutai has said in a statement.

For matatus operating in Nairobi, for example, he approximated that the new fares will increase by between Sh10 and Sh20, but purely dependant on the distance the matatu covers.

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Retrogressive

In retaliation, however, the Consumers Federation of Consumers (COFEK) has faulted the Matatu Operators, terming the planned increase a retrogressive move.

“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 in a statement.

In Nairobi, for example, motorists will pay a record Sh130.15 per litre of petrol or about Sh17.9 more beginning next month when petroleum products start attracting 16 per cent value added tax (VAT) as was proposed during the 2018/2019 budgetary reading.

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Last week, Treasury Principal Secretary Kamau Thugge confirmed that petroleum products will start attracting the tax on September 1 in line with Kenya’s promise to the International Monetary Fund (IMF) two years ago.

At prevailing prices diesel, used to power commercial vehicles such as buses and tractors, will cost Sh16.5 more to stand at Sh119.77 a litre after adding the tax.

The new tax burden will also be felt among consumers of Kerosene, who are mostly low-income households that use it for lighting and powering cooking stoves. A litre of kerosene will cost Sh99.44, a Sh13.7 increase from current price of Sh85 per litre.

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