Rescind decision to levy VAT on fuel for the sake of jobless youth - Daily Nation

Rescind decision to levy VAT on fuel for the sake of jobless youth

Monday September 3 2018

The 16 per cent value added tax (VAT) on petroleum products, which came into effect on September 1, will have dire repercussions on young Kenyans.

The move is bound to increase commodity prices, causing more pain to a population already suffering from the unbearably high cost of living.

Youth unemployment is one of Kenya’s main challenges. Statistics show that 70 per cent of its young people are unemployed and a significant number are not in gainful employment. Worse, a majority of those with jobs are underpaid.

In its recent report, the World Bank revealed that Kenya has the largest number of jobless youth in East Africa. Based on the high-voltage politics that we have seen in the past, this is a ticking time bomb that should not let the government sit pretty.

ECONOMICALLY DEPRIVED

As we have seen in the past, unemployed, economically deprived, vulnerable youth are most likely to be hired for a few shillings to fuel political chaos.

Although Kenya’s economy continues to grow, now ranked the sixth-fastest growing in Africa, youth unemployment is increasing at a higher rate than Uganda or Tanzania’s.

There is, therefore, a need to interrogate our economic model with a view to exploiting existing opportunities to address such socioeconomic problems as youth unemployment.

No doubt, the new tax measure will hamper the government’s ability to create jobs and improve the living standards of youth.

The private sector, too, will suffer increased cost of production, driven by high transport costs. This will lead to leaner production lines, hence job losses as businesses downsize.

INCREASING TAXES

It is, therefore, foolhardy for the government to claim to give youth money to start enterprises while increasing taxes.

Kenya’s problems with regard to revenue and public expenditure include loopholes that encourage corruption, a weak revenue collection system, poor prioritisation and wastage.

The government must uproot corruption and seal loopholes in revenue collection, not introduce taxes. It is imperative to reform revenue collection, eradicate tax evasion and enhance efficiency in public expenditure.

For Kenyans, more so the youth, new taxes, increased cost of living and the skyrocketing cost of doing business is as if the government has literally put a noose around their neck.

ACCOUNTABILITY

The government is simply suggesting that it does not care about the youth, which goes against its promises to them.

That Kenyans have no choice than to yield to high taxation in a public expenditure system that lacks integrity, transparency and accountability is, in itself, a mockery of citizens who work hard to push the socioeconomic positioning of the nation forward.

The multiplier effect will be a hurting citizenry and economy.

RAPHAEL OBONYO, via email.