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XINHUA NEWS SERVICE REPORTS FROM THE AFRICAN CONTINENT

 

Kenyan investors say new fuel tax
to slow down investments, business     

NAIROBI, (Xinhua) -- Kenyan investors on Monday decried the new tax measures on fuel that will take effect on Sept. 1, saying it will have a major impact on the economy as it will hold up investments and business and urged the government to review it.

The investors under the Kenya Private Sector Alliance (KEPSA) said the government’s plans to impose a 16 percent VAT on price of fuel will result in an increase in inflation rate by over 4 percent.

It said the projected rise in pump prices will result in an increase in the cost of production and manufacturing of commodities by both small and big businesses, an increase in cost of transport and an increase in cost of household consumption of goods and services.

The tax measure are on the back of a push by the International Monetary Fund (IMF) to enable the governments raise more revenue to curb mounting debt following increased domestic and external borrowing.

The measure was among the conditions given to Kenya by IMF in 2015 when it offered the East African 1.5 billion U.S. dollars standby loan.

“In our opinion, the increase in cost of doing business will not only impact the local investors but also render our economy uncompetitive and repel investors who would invest directly in our economy including the Big Four opportunities,” KEPSA said.

The investors urged the government to reconsider the proposal to charge VAT on fuel, and instead consider pro-business strategies that strike a structural fiscal balance, address the inefficiencies with tax collections systems, and increase the tax bracket to avoid tax fatigue by a few tax payers. 

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