Commuters to neighbouring EA countries to bear brunt of VAT on fuel

Passenger at Coast Bus offices in Mombasa
Passenger at Coast Bus offices in Mombasa. PHOTO | BRIAN MWANGI | NMG 

Commuters will from next week pay Sh100 to Sh250 in additional charges from Mombasa to any destination within East Africa following the 16 per cent value added tax on fuel.

Public service vehicles including Modern Coast, which traverses the East Africa region, and Coast Bus said commuters will have to bear the brunt of the new tax.

The firms announced new fares from Mombasa to upcountry and other neighbouring countries including Uganda, Tanzania and Kigali.

Modern Coast head of communications Jarvis Sunday said the company is looking into reviewing the ticket prices.

Currently, the company charges between Sh1,500 and Sh2,000 from Mombasa to Dar-es-Salaam and Sh4,000 to Sh4,700 between Mombasa and Kampala.


“We are meeting to have a review on our ticket prices starting from next week. We are going to have the prices go up by Sh100 because the cost of fuel has gone up and this directly affects our operation. We have to fight to remain afloat,” Mr Sunday said.

The company, with has more than 85 buses, urged their clients to brace themselves for the increase.

“Our running costs are crazy and with an increase of fuel it cuts across all sectors. Kenyans will feel the pinch as this will affects commodities at the shelves,” he added.

Coast Bus proprietor Ajaz Mizra said the company will definitely increase its fares between Sh150 to Sh200 per person.

“It will depend on the destination but in Nairobi it will be between Sh100 to Sh150 and Kisumu between Sh200 and Sh250. There’s no way out, we have to hike fares,” Mr Mizra.

He said his firm incurred losses running into millions after nine buses, which were to depart from Mombasa to various upcountry destinations, were grounded due to lack of fuel.

“We have not had fuel since morning our supplier has not supplied fuel since morning yet we have buses which were supposed to depart in the afternoon. we don’t know if we will depart no one is selling fuel and the people who are selling fuel are not loading from petrol stations,” he said.

The angry businessman said three dealers who supply his company with fuel refused to load fuel.

“We are stranded we don’t know what to do maybe we will have to buy at petrol stations because we are lacking supply. But by the end of the evening petrol stations will run out of fuel due to the situation,” Mr Mizra said.

Other interventions

Mombasa Governor Hassan Joho urged President Uhuru Kenyatta to consider other interventions on tax instead of imposing the VAT.

Modern Coast bus

Modern Coast bus. FILE PHOTO | NMG

The ODM deputy party leader said the levy will have a net effect of increasing the cost of goods.

"I have noted with concern, the suffering Kenyans are being subjected to following the increase in fuel prices after Introduction of the controversial value added tax of 16 per cent," Mr Joho said.

He said Kenyans are already overburdened by difficult economic circumstances like low incomes, unemployment and inflation.

"This would further worsen their livelihoods. While keenly aware of our international and domestic financial obligations, I wish to urge the President to assent to the Finance Amendment Bill that suspends the implementation of this tax," pleaded the governor.

He urged Treasury officials and other concerned government officials to relook into the matter.

"Especially on the expenditures side. Some of the larger obligations can be restructure or rescheduled. Expenditures on large infrastructure project should also be reconsidered," he added in a statement to newsrooms.

The ODM official is among other politicians who have joined Kenyans in calling for Mr Kenyatta to reverse fuel cost rise.

This comes as hundreds of travellers, including school children, were stranded at different bus stations in Mombasa after some matatus boycotted work.

The learners, who were reporting back to school for their third term, were left stranded due to lack of vehicles.