Central Organisation of Trade Unions (Cotu) has started the push to have the National Treasury stop the implementation of tax on petroleum products that will result in the price of fuel shooting up by Sh17 a litre.
At the same time, travellers within Mt Kenya region will be forced to pay 20 per cent more in fares as matatu owners devise ways to cushion themselves against the implementation of Value Added Tax (VAT) on petroleum products from September 1.
Mt Kenya Matatu Owners Association has asked members of the public to bear with the increase in fares to last as long as the government maintains the new fuel levy.
On Thursday, Cotu announced it would begin deliberations with different stakeholders next week to petition the government to consider postponing again the charging of the proposed VAT on petroleum products.
Having deferred it for two years, the National Treasury plans to implement the tax next week.
But Cotu deputy secretary-general Benson Okwaro said the planned tax imposition would mean the tax burden weighs even heavier on fuel prices triggering a rise in prices of basic commodities and transport.
He noted that while taxation is necessary to keep the country’s economy on its feet, driving up the prices of goods and services was not a permanent solution and advised the State to expand its tax bracket to cover alternative areas such as housing.
An increase in fuel prices will join a growing list of taxes that experts have warned could hit investments and lead to loss of jobs.
Mt Kenya Matatu Owners Association chairman Rufus Kariuki announced fare increases after sacco officials met at a Thika hotel.
“We are shocked that the government is increasing fuel levies at a time when the country is producing its own oil,” said Mr Kariuki.
“We have been trying so much to cushion our passengers from the fluctuating fuel prices, but we can’t do it anymore. We have to hike the fares a little so as to stay in business,” he said.