Majority of Kenyans opposed to new fuel taxes and housing levy

IDS director of research Paul Kamau. [Boniface Okendo, Standard]

Majority of Kenyans are opposed to increased taxation on petroleum products and the implementation of the Housing Levy amid a biting cost of living crisis, according to a new study.  

The survey, conducted by Afrobarometer in conjunction with the University of Nairobi’s Institute of Development Studies (IDS), shows that nine in 10 Kenyans disapprove of the government’s push to increase taxes on fuel in its bid to generate more ordinary revenue to pay debts and fund its programmes. 

The research also shows that 71 per cent of the respondents want the Kenya Kwanza government to withdraw the housing levy for salaried employees. Afrobarometer national investigator in Kenya and IDS director of research Paul Kamau said the study polled sampled 2,400 respondents across the country.

“In line with our population distribution, we had 43 per cent of the sample drawn from urban areas and 57 per cent from rural areas,” Prof Kamau said.

“Only 40 per cent said the country is heading in the right direction, meaning that when you combine all the factors that constitute economy in our own perception, then majority think we are not heading in the right direction.”

Young people

In the findings released on Wednesday as part of a wider research that captured almost all sectors of the economy, most young people want the government to listen keenly to their plight, more so on education and jobs.

The findings indicate that six out of every 10 Kenyans want the government to live within its means, approving the collection of taxes locally but insisting on prudent use of what has been collected as opposed to arbitral increases for mundane purposes.

On new taxes, the percentage of respondents who support is rather low.

“The question that was asked is whether they approve of the new changes (such as) introduction of housing levy for salaried employees...and increasing tax on petroleum products...the percentage of those who agree or strongly agree is rather small, particularly if you look at Gen Zs,” said Dr Nelima Barasa, senior lecturer in the Department of Economics and Development Studies and Afrobarometer co-national investigator in Kenya.

“Basically all the age groups, less than 10 per cent approve of this.” Afrobarometer is a non-partisan survey research network that provides reliable data on African experiences and evaluations of democracy, governance, and quality of life.

The survey also showed that 50 per cent of Kenyans are of the view that it is better to pay fewer taxes, even if it means there will be fewer services provided by the government.

A majority (75 per cent) say it is difficult to know which taxes to pay while 88 per cent cannot ascertain how the government uses tax revenue.  A high of 66 per cent also believe that taxes are punitive to the poor.  

Kenyans have been digging deeper into their pockets to purchase basic commodities as inflation has soared on fuel prices. Pressure has been mounting on President William Ruto’s administration to urgently address the runaway cost of living that is squeezing Kenyans hard.

Kenyans have long complained about the high cost of petroleum, which has been attributed to the huge component of taxes and levies considered by the Energy and Petroleum Regulatory Authority (Era) during its monthly pricing.   

Despite the collapse of the Finance Bill 2024 following unprecedented protests led by Gen Z, which saw them storm Parliament, the Epra has proceeded to hike the Road Maintenance Levy by 39 per cent, pushing it from Sh18 to Sh25.  

This came despite a pledge by former Transport CS Kipchumba Murkomen that the proposal which sought to increase revenues collected from the levy from Sh84 billion to Sh115 billion to assist in timely maintenance of roads, would be dropped in favour of other alternatives.   

Epra’s move has elicited sharp reactions with the Law Society of Kenya President Faith Odhiambo terming it “illegal and unconstitutional” as it ignored feedback from the public and was never approved by Parliament.  

“The LSK calls for the immediate reversal of this unconstitutional and procedurally action, failure to which we will take such measures as may be necessary to ensure full compliance with the law by the government,” she said in a statement.  

“Furthermore, we note that the RML was increased without the proper procedural publication in the Kenya Gazette, as required under Section 3 of the Road Maintenance Levy Fund Act, 1993,” she added. In the Finance Act 2024, later scrapped, value added tax on petroleum products was also increased from eight per cent to 16 per cent, sparking public protests.