Nairobi,KENYA:Central Organization of Trade Union COTU, has threatened to call for an industrial action of all workers if the government proceeds with the proposed taxation of petroleum products by 16 percent value-added tax (VAT) in the coming month of September.
COTU argues that with such attempts by Treasury Cabinet Secretary Henry Rotich, the action will translate into an automatic increase in the cost of living and strain the operation and growth of businesses in the country.
Addressing members of the press on Thursday in Nairobi, COTU Deputy Secretary-general Robert Okwaro, cautioned the government against the move citing, possible repercussions that come with imposing a higher tax on fuel as in the long run, it will affect basic commodities in the country.
” High tax fuel will affect basic services and commodities in the country and already the peace and stability that has been witnessed in the transport sector over the period is now under threat and the biggest recipients of such disturbances are the workers who have to report on duty on schedule,” Warned Okwaro.
Okwaro added that, COTU in one week time will be meeting and consulting with other like-minded Kenyans and association, like employers, civil societies, transport and manufacturing industries with a view to stopping the punitive move on fuel by the government.
However, on March 14, 2018, the National Treasury defended the plan to introduce 16 percent tax on petroleum products from September 1 to collect about sh 34 billion revenue annually.
Treasury CAS Nelson Gaichuhie while appearing before Senate energy committee chaired by Nyeri senator Ephraim Maina, said that the government will implement the law in taxing petroleum products but the resultant effect will be an extra cost.
Gaichuhie told the committee that the International Monetary Fund IMF has been pressing Kenya to revoke the tax exemption on all petroleum products for the country to raise more revenue to address the budget deficit and reduce the national debt.
Parliament passed the VAT in 2013, introducing tax on fuel products; however, its implementation was given a three-year grace period to September 2016. The government further extended the period by two years to September this year after Treasury raised the Road Maintenance Levy on each litre of petrol and diesel to sh 18 from sh 6 in
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