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Gov't to increase Fuel Levy by 38%

National Assembly Committee Finance Committee has started engagement with government agencies on Finance Bill 2024 before retreating to finalise proposals

Roads CS Kipchumba Murkomen meeting the National Assembly Departmental Committee on Finance and National Planning
  • National Assembly Committee engages with government agencies on Finance Bill 2024 proposals
  • Committee members express concerns about effective use of allocated budget and public trust issues
  • The committee's findings and report will play a crucial role in shaping the final version of the Finance Bill 2024.

The National Assembly Departmental Committee on Finance and National Planning has entered into the next phase of the Finance Bill 2024, which is holding engagements with government agencies over the proposal in the bill.

The committee, which concluded its public participation phase on Monday, spent long hours hearing concerns from various stakeholders and members of the public during a two-week-long exercise.

On Tuesday, the committee met with Cabinet Secretary for Roads and Transport, Kipchumba Murkomen who backed the increase of the Fuel Levy charge from Sh18 to Sh25 per litre.

The proposed hike represents a 38 per cent increase in the levy which directly impact the cost of fuel.

This change has stirred significant debate among stakeholders and the public.

During the discussions, CS Murkomen advocated for the increase, citing the need for additional revenue to address the backlog in road maintenance.

He highlighted the potential benefits for e-mobility and improvements in the size and quality of the road network.

However, committee members were not entirely convinced. They stressed the importance of demonstrating that the allocated budget is being used effectively.

The committee chair, Kimani Kuria, emphasised the public's trust issues, stating, “Hon. CS, the challenge that this Committee has identified from the stakeholders is that there is a trust deficit and Kenyans are asking how their money is being used out there.”

During its engagement with Environment and Climate Change PS Festus Ng’eno, the MPs raised questions about the proposed Eco-Levy and its potential impact on the manufacturing sector.

PS Ng’eno defended the introduction of the Eco-Levy, highlighting its importance in addressing the proliferation of problematic waste streams over recent decades.

He cited successful implementations of similar levies in countries such as Barbados, Germany, Estonia, Ireland, Jamaica, Guyana, Ghana, and the Bahamas as models to support the initiative.

"The revenue generated from the levy is earmarked for such initiatives as putting up enhanced waste management systems, creating public awareness and education through nationwide campaigns, to support innovation and enhanced research and development in green technologies,” he explained. .

He further emphasised that the funds would support community-based environmental programs aimed at waste reduction, tree planting, and the restoration of degraded ecosystems.

However, Committee Members David Mboni (Kitui Rural MP), Julius Rutto (Kesses MP), and Joseph Munyoro (Kigumo MP) expressed concerns about the management and allocation of the levy funds.

They questioned how the funds would be ring-fenced to ensure they are used specifically for the intended environmental initiatives.

“When this levy is collected alongside other revenue, how will you determine what goes to the initiatives you have highlighted if it is not ring-fenced?” posed Hon. Mboni.

The legislators emphasised the need for clear mechanisms to ensure timely disbursement of funds to avoid delays that could jeopardise the envisaged environmental projects.

The discussion underscores the delicate balance the government must maintain between generating revenue for crucial environmental initiatives and ensuring transparency and accountability in fund management.

The legislators' concerns highlight the importance of having robust systems in place to monitor and allocate the taxpayer funds effectively.

As the Finance Bill 2024 progresses, the government will need to address these concerns to gain public trust and ensure the proposed measures are in the country's best interest.

The committee's findings and report will play a crucial role in shaping the final version of the Finance Bill 2024.

With public participation now concluded, the focus will shift to refining the proposals and addressing the feedback received.

It remains to be seen how the government will balance the need for increased revenue with the demand for transparency and effective utilisation of public funds.

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