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September 24, 2018

We need to see value for new fuel taxes

A fuel station attendant fuels a car at along Moi Avenue Mombasa. Photo/File
A fuel station attendant fuels a car at along Moi Avenue Mombasa. Photo/File

The Auditor-General of Kenya, Edward Ouko, the man charged with auditing government departments and issuing a report, says Sh2.5 billion meant for roads in the last financial year cannot be accounted for.

By the end of nine months of the past financial year, the Kenya Revenue Authority reported it had raised Sh32 billion from the Road Maintenance Levy Fund.

This is money raised through excise duties imposed on petroleum.

The Sh32 billion represented a massive 48 per cent growth compared to the Sh21 billion raised over the same period the previous financial year.

Despite this, the Treasury Cabinet Secretary Henry Rotich, slapped an extra Sh6 per litre in excise duty on petrol and diesel.

That is a 50 per cent hike in taxes something that would hardly be entertained in almost any other country. 

This will see the government extract from its motorists an extra Sh20 billion plus, in these new taxes. This is robbery. This government has had nothing to do with the global drop in fuel prices from US$110 per barrel of crude oil to about $40.

Yet it has moved with alacrity to benefit from this drop by denying Kenyans the opportunity to benefit from these lower prices. It has made itself the beneficiary by slapping on more taxes.

One wonders what will happen should the global oil prices recover.

Will we see Petrol at Sh150 a litre? In the meantime, we keep getting these stories of unaccounted for funds. It is high time parliament begun demanding accountability mechanisms for new levies like these.

The Road Levy will fetch almost Sh70 billion with these new taxes but how will that money be spent? Presumably, the fund is meant to help maintain our roads.

Yet too many of these roads are in pathetic condition.

Just to name one, Waiyaki Way is in bad condition. Occasional band aid measures where a few patches of the road are re-carpeted with a thin layer of tarmac are only done closer to Westlands presumably where policy makers might see them but by and large the highway is in disrepair.

One wonders which roads are being maintained.

With this kind of money, not only should many roads which have fallen into disrepair be maintained, but services on the roads should be enhanced.

A full-fledged Highway Patrol unit can be fi nanced from this money to ensure there is police presence up and down our highways equipped to deal with traffic issues, accidents, indiscipline and so on.

But right now, this money is just disappearing into projects we do not know about.

Mbugua is a communications expert who comments on topical issues.

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