In the wake of the passing of the Finance Bill 2023 by the august house, Kenyans are set to feel the pinch once the bill is tabled for presidential assent and thence made into law. Amongst the bills that are set to be made into law is the 16% fuel levy which is expected to raise the cost of living even higher.
The contentious bill is expected to exacerbate the already untenable cost of living in the country which had been partly caused by the protracted Russo-Ukrainian War.
Key amongst the 87 bills is the 16% value-added tax on fuel which was passed overwhelmingly by 184 Members against 87 who opposed it. The bill once in place will result in an increase in the already high prices of fuel. The price of petrol is ksh182 and that of diesel is ksh167.28
So you see when prices of fuel are revised upwards there’s always a direct effect on the cost of living as energy is a major component of the economy, in other words, an increase in fuel prices would directly result in a proportional increase in prices of commodities and services.
What should Kenyans expect?
When the bill becomes law, there would be an increase in the cost of production due to an increase in manufacturing costs which is a result of an increase in the prices of raw materials
- An increase in electricity prices due to an increase in production cost would also contribute to increased manufacturing and processing costs.
- Due to all this commodity prices are set to skyrocket even higher with Kenyans having to dig deeper into their pockets to be able to sustain themselves.
- The Price of sugar which is already at its all-time high and will increase from ksh215 while Maize flour which is Kenya’s staple food would rise from the current high of ksh250.
- Other goods ranging from electronics, groceries, stationaries machinery, and others would also be affected.
- Transportation cost increase is also imminent as bus fare will go up as well as transportation services.
Many leaders and Kenyans alike have termed the bill as repressive as it aims to increase the tax burden on Kenyans leaving them with little or no disposable income for their daily use. The bill which also contains a raft of additional taxes was set by the government so as to be able to collect as much revenue as possible to finance the national Budget.