Yesterday, the National Assembly Finance and Planning Committee’s tabled its report on the Finance Bill 2024 on the floor of the house. After their press conference earlier in the day it had seemed that Kenyans had got some reprieve from the punitive 2.5% Motor Vehicle Tax that was removed.
However, this was not perceived win for Kenyans, rather a hoodwink. The committee’s chicanery saw them introduce a new Clause 66 in the Road Maintenance Levy.
“To help raise sufficient funds to maintain and repair roads across the country the Committee recommends an increase of the Levy pursuant to Section 3 of the Road Maintenance Levy Fund Act from KES 18 to KES 25 per litre all petroleum fuels, ” reads part of the committee’s report.
If approved, the increase of the Road Maintenance Levy by 38.9% will have detrimental effects on Kenyans wallets at the pump. Going by current pump prices, Super fuel is projected to rise from KES 189.84 to KES 196.84/litre. Cost of Diesel will increase from KES 173.10 to KES 180.10/litre. Kerosene, which is relied on by low-income earners, will move from KES 163.05 to KES 170.05/litre.
In the fiscal year 2022/23, the Kenya Revenue Authority (KRA) collected Ksh. 84.143 billion from the levy. However, there has been a negative impact on tax collection in 2023/24 due to high fuel prices and a decrease in the value of the Kenyan shilling.
The finance committee reasons for the proposed increase are that the Levy has not been changed since 2017 despite the increase in petroleum fuel prices per litre in Kenya. Secondly, the levy is deposited into the Road Maintenance Levy Fund for annual repair and maintenance of roads over the years. The committee observed there has been an increased cost of road repair and maintenance.
The fall in the collections under the road maintenance levy has continued to affect the repair and maintenance of highways, urban, and rural roads. Recent El Nino linked heavy rains and flooding has further worsened the extent of road destruction in the country.
