Market News

Matatu owners demand tax cut

Simon Kimutai

Matatu Owners Association chairman Simon Kimutai. PHOTO | KANYIRI WAHITO | NMG

jameskariuki-img

Summary

  • Matatu operators are demanding that the Kenya Revenue Authority (KRA) cuts the amount they are charged in advance tax per seat for their vehicles, citing reduced income due to Covid-19 regulations that have nearly halved vehicle capacity.
  • MOA chairman Simon Kimutai said operators should be charged based on the Covid-19 mandated seating arrangements, which stipulate that a matatu can only carry 60 percent of its original capacity to maintain social distancing.
  • A 33-seater bus that pays Sh23,760 per annum is now carrying a maximum of 17 passengers, while 26-seaters that are now limited to15 passengers are still paying Sh18,720 in advance tax.

Matatu operators are demanding that the Kenya Revenue Authority (KRA) cuts the amount they are charged in advance tax per seat for their vehicles, citing reduced income due to Covid-19 regulations that have nearly halved vehicle capacity.

Matatu Owners Association (MOA) chairman Simon Kimutai said operators should be charged based on the Covid-19 mandated seating arrangements, which stipulate that a matatu can only carry 60 percent of its original capacity to maintain social distancing.

“The KRA is still demanding Sh720 per seat per year or Sh10,080 for a 14-seater matatu whose capacity has been reduced to nine seats, while a 41-seater buses that pay Sh29,520 per annum have had their capacity reduced to 25 passengers,” said Mr Kimutai.

“Why do you charge me per seat, then criminalise carrying full capacity…How do I recover my expenses during this Covid-19 period when business is at its lowest?”

A 33-seater bus that pays Sh23,760 per annum is now carrying a maximum of 17 passengers, while 26-seaters that are now limited to15 passengers are still paying Sh18,720 in advance tax.

Mr Kimutai spoke in Nairobi after forwarding a memorandum to KRA demanding for a review of the advance taxes.

The advance tax together with insurance, parking, vehicle inspection, fuel levy and Transport Licensing Board (TLB) fees are paid upfront before any matatu gets on the road to carry passengers.

“We do not mind paying taxes, but we wonder why we are being overlooked when other sectors have been given a reprieve,” said Mr Kimutai.

In an earlier interview, National Transport and Safety Authority director Wilfred Okemwa said no matatu should be inspected and certified as roadworthy before it shows proof of advance tax payment.

The matatu sector has been adversely hit by Covid-19 protocols where all movement public transport activity is prohibited after 10pm until 4am, a condition that has hurt long distance operators that have rescheduled operations to conform.

Last month, Kenya Railways introduced night travel service along Nairobi-Mombasa route cashing in on the night travel ban.