Businessman and former gubernatorial aspirant Bundotich Buzeki says he has embarked on an immediate downsising plan at his freight company after MPs approved the 16 per cent VAT proposed in the Finance Bill, 2023.
Fuel prices are set to go up once the new tax becomes effective, and with increased fuel prices will come higher transportation costs.
Buzeki said as a result, he will have to get rid of his old trucks and send them to a scrap yard.
Due to the rise in VAT on fuel from 8 per cent to 16 per cent, we are now officially downsizing with immediate effect. All old trucks, including those with Euro 3 and below, will be sent to the scrap yard. Leteni lori ya thitima," he said in a tweet Wednesday evening.
Buzeki acknowledged that the downsizing of trucks at his transport company will certainly come with job losses.
"The current administration seems to lack a plan for job creation and is solely focused on collecting revenue for expenditure," he said.
Due to the rise in VAT on fuel from 8% to 16%, we are now officially DOWNSIZING with immediate effect. The current administration seems to lack a plan for job creation and is SOLELY focused on collecting revenue for EXPENDITURE. All OLD trucks, including those with Euro 3 and…
— Buzeki Kiprop Bundotich-OGW (@BuzekiKiprop) June 21, 2023
Buzeki is the Executive Director and founder of Buzeki Group of Companies, a business conglomerate in Kenya.
The company is a major player in the logistics and heavy commercial transportation industry in East Africa which provides employment to Kenyans and beyond.
Members of Parliament on Wednesday voted to pass the proposed 16 per cent VAT on fuel.
Some 184 MPs voted to increase the VAT from 8 per cent to 16 per cent, while 88 voted against it.
A total 272 Members of Parliament took their vote.
In May, President William Ruto defended his decision to increase the VAT on petroleum products to 16 per cent saying he intended to raise Sh50 billion from the enhanced VAT on petroleum products.
"The eight per cent will give us Sh50 billion to deal with roads across the country," he said during an interview.
Ruto said the move is important to seal loopholes being exploited by businessmen to deny the country the much-needed revenue.
