President Uhuru Kenyatta’s directive to the transport regulator
to withdraw licences of public service vehicle (PSV) operators
overcharging passengers on the new fuel tax is not backed by law.
Mr
Kenyatta directed PSV operators not to raise fares beyond the rates
recommended by the National Transport and Safety Authority (NTSA) after
the 16 per cent VAT on all petroleum products took force on September 1.
Lawyers, matatu operators and NTSA sources said that the transport
regulator has no power to regulate fares. Simon Kimutai, chairman of the
Matatu Owners Association — whose members control 80 per cent of the
country’s public transport sector — said NTSA has no legal mandate to
set fares, adding that ticket prices are influenced by market forces.
The PSV operators said the fares displayed inside their vehicles are a mere guide to passengers and not legally binding.
The
operators have increased fares by an average of 20 per cent after fuel
prices rose over the new tax. Mr Kenyatta has proposed it to be cut to
eight per cent from 16 per cent following a public outcry. “At the
meeting, President Kenyatta emphasised that transporters should not take
advantage and increase fares beyond those recommended by the NTSA,”
State House said in a statement after reaching a deal with ruling party
MPs to back the fuel tax.
“The President warned that
any transporter who will increase fares beyond the recommended ones will
lose their PSV licences.” NTSA Director-General Francis Meja did not
respond to the Business Daily on Mr Kenyatta's orders on fares. Fuel
prices have risen by 12 per cent to an average of Sh128.70 per litre of
super petrol in the wake of the new tax.
Last Thursday
Mr Kenyatta rejected the Finance Bill that sought to postpone the tax
altogether. Parliament will meet today to examine Mr Kenyatta’s new
proposal. Implementation of the new VAT on fuel is key to government
plans to close gaps in its fiscal deficit and funding essential
programmes.
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