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Economy

Treasury eyes MPs’ nod for toll stations

The Nairobi-Thika highway. It is among the
The Nairobi-Thika highway. It is among the roads where motorists may soon start paying toll charges. FILE PHOTO | NMG 

Motorists will start paying toll charges on some national roads from July if MPs adopt changes to the law tabled in Parliament through the Finance Bill.

The Bill seeks to revive the 15 toll stations that previously saw motorists pay to use major highways such as the Nairobi-Nakuru, Nairobi-Mombasa, Nairobi-Thika, Kisumu-Busia, Nakuru-Nyahururu and Ahero to Kisii roads.

If implemented, the new charges, which amount to a new layer of taxation, will see motorists pay toll charges on top of the fuel levy despite the fact that roads are funded using tax revenues.

There will be 15 toll stations which will include Athi River, Gilgil, Ruiru, Londiani, Katito, Amagoro, Nanyuki, Bahati, Amagoro and Kiminini.

“Stations specified in the first column of Yatani asks MPs for green light on toll stations the First Schedule are declared to be transit toll stations for public roads respectively set out in the second column,” the Finance Bill 2020 states.

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Money paid to the toll collector will be channeled into a fund to be known as the National Roads Toll Fund which will be managed by the National Treasury.

The tolling fund will be used to finance maintenance of highways and repayment of loans used to build other roads, especially those built by private contractors in a business environment where the State is struggling to meet revenue targets amid rising expenditure like debt repayment.

“Toll in respect of every vehicle approaching and proceeding through a toll station be paid to the toll collector,” the Finance Bill proposes.

“This Act may be cited as the Finance Bill, 2020 and shall come into operation as…all other sections, on the date of assent.”

The proposed amendments to the Public Roads Toll Act will become active on the date of signing of the Finance Bill into law, which has been set to apply from July 1.

Toll rates will be set by the minister in charge of roads, who will also appoint toll collectors in line with the proposed changes to the law. The minister will also have powers to exempt a segment of vehicles from paying the toll fees.

Vehicles will have four segments in the law; private cars, matatus, heavy goods and light goods vehicles.

Road tolls were initially introduced in Kenya in the late 1980s but were removed in the mid-1990s in favour of the Roads Maintenance Levy as well as the Fuel Levy to eliminate corruption at toll stations.

The Roads Maintenance Levy is currently charged at Sh18 per litre for petrol and diesel. Road tolling was conceptualised in the developed world as a form of taxation through which governments could recoup the cost of road construction and maintenance given the sharp increase in vehicle numbers.

Such a system allows private firms that have built roads to charge a fee — better known as tolls — to recoup their investments before handing over the highways to the government.

Proposed amendments to the Tolls Act follow the publication of draft regulations by the Treasury to guide the establishment of the National Roads Toll Fund.

Ukur Yatani, the Treasury Secretary, has already invited the public to give their views on the proposed regulations, which are set to be tabled before Parliament for debate and approval.

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