Fuel tax: Uhuru has to pick IMF or the people

Saturday September 08 2018

Motorists queue to fill their tanks in Makupa, Mombasa, on September 6, 2018. PHOTO | KEVIN ODIT | NATION MEDIA GROUP


President Uhuru Kenyatta has perhaps one of the biggest decisions of his Presidency to make when he returns from his long trip overseas.

The Finance Bill 2018, which was amended in Parliament to delay the enforcement of the 16 percent fuel tax, is waiting at the desk for his signature.

While he was away, public debate over the tax that kicked in on September 1 in spite of protests by members of Parliament, wananchi, industry and consumer groups has been explosive.

A decision by independent fuel transporters to ground their tankers caused an acute shortage of petrol in filling stations across the country in the past one week, inflicting the first major pain of the controversial tax imposed as a condition for a loan facility with the International Monetary Fund (IMF).

The 16 percent value added tax (VAT) on petroleum products has been delayed twice in the past, putting more pressure on the government to implement it this time around.



For Mr Kenyatta, he finds himself in a rather awkward position where he pretty much has to choose between the IMF and the people. For whom will he sign the Finance Bill 2018?

There is a sense that the President and his handlers are exploring the possibility of striking a balance between the interest of the country’s intimidating creditor and that of his restless people.

Treasury Cabinet Secretary Henry Rotich, soon after flying in from China where he and the President reportedly negotiated still more loans, walked into a meeting with the leadership of the National Assembly and the House Budget Committee to discuss the public controversy sparked by the Finance Bill.

Mr Rotich and National Assembly Speaker Justin Muturi said at a press briefing that further meetings have been lined up to discuss the matter.

Media reports have since then alluded to suggestions to reduce the fuel tax to 12 percent.


Whether the Treasury and Parliament find a way to go around the fuel tax or the President goes ahead to sign the Finance Bill will become clear in the coming days.

But there is already an important governance lesson for Kenyans in the fuel tax standoff.

Sometimes governments are only as unresponsive as their gullible, passive and clueless citizens.

Citizen participation remains one of the weakest links in Kenya’s governance despite the Constitution providing for it.

The overwhelming majority of people who voted for President Kenyatta’s Jubilee Party in the last election did so not because of its tax policies but due to the ethnic affiliation.

At a time like this last year, Mr Kenyatta only needed to frame the fuel tax protests as an Opposition plot to have his way.

The current dilemma he appears to be in over the fuel tax demonstrates how life can get much better for citizens if they understood their interests, refused to be manipulated for political reasons and raised their voices against bad governance.

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