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November 20, 2018

Matatus suspend fare rise after tax on fuel is put off

Matatus along Digo Road as pictured on August 30, 2018/ ERNEST CORNEL.
Matatus along Digo Road as pictured on August 30, 2018/ ERNEST CORNEL.

Public Service Vehicles at the Coast will not increase fares for the next two years beginning today, the region’s Matatu Owners Association coordinator Salim Mbarak has said.

The decision follows Wednesday’s unanimous vote by MPs to put off the 16 per cent tax on petroleum products until September 2020.

Parliament passed the Value Added Tax in 2013, introducing tax on petroleum products. Its implementation was, however, given a three-year grace period to September 2016.

But the government extended the period by two years to September this year after Treasury raised the Road Maintenance Levy on each litre of petrol and diesel to Sh18 from Sh6 in 2016.

The 16 per cent VAT plan was met with resistance, with economists warning implementation would increase the cost of living against stagnant incomes.

“Any matatu operator violating this directive will be charged,” Mbarak said yesterday.

MOA had earlier this week announced fair increases of between Sh10 and Sh50 for county and inter-county services. Mbarak said the last fares review was done in 2014 "and it will not change until 2020".

Commuters plying Mtwapa-GPO route were to pay a new fare of Sh90.Kiembeni-Ferry/Docks would have cost Sh80, Bamburi-Docks/Ferry/King’orani Sh70, Reef-Mwembe Tayari Sh60 and Mishomoroni-Mwambe Tayari Sh60.

Commuters headed to Ferry or Docks from Magongo, Migadini, Portreitz, Jomvu, Mikindani were to pay Sh70.

Those from Miritini to Mwembe Tayari were to pay Sh80 and Tudor-Docks/Ferry commuters Sh40. Mombasa-Malindi route fair was to range from Sh350 ton Sh450.

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March this year, National Treasury defended the plan to introduce tax on petroleum products saying it will aid collection of about Sh34 billion revenue annually.

Treasury said the International Monetary Fund has been pressing Kenya to revoke the tax exemption on all petroleum products for the country to raise more revenue to address the budget deficit and reduce the national debt.

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