Kenya announced Friday 30 June 2023 a hike in fuel prices in defiance of a court order blocking the implementation of a raft of new taxes. The cost of petrol, diesel and kerosene will go up from Saturday, the Energy and Petroleum Regulatory Authority said in a statement, a move that will have a ripple effect in a country hamstrung by a severe cost of living crisis. EPRA said the price of petrol would jump to more than 195 shillings ($1.4) a litre to take into account the doubling of VAT on fuel products to 16 per cent.
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The announcement came despite the High Court of Kenya earlier suspending hotly contested new legislation that provides for new or increased taxes on certain salaries, a range of basic goods and services including fuel, food and mobile money transfers as well as a controversial housing levy. President William Ruto had on Monday signed into law the finance bill which is expected to generate more than $2.1 billion and is aimed at shoring up the government’s depleted coffers and repairing the heavily-indebted economy.
But the high court in Nairobi on Friday suspended the implementation of the legislation pending a hearing next Wednesday on a case filed by a senator challenging its constitutional legality. Veteran opposition leader Raila Odinga — who has staged a series of demonstrations this year over Kenya’s economic woes — has asked his supporters to boycott the taxes, rallying them to carpool or walk whenever possible.
Kenya faces economic hardship
Despite the added burden on Kenyans already facing deep economic hardship, Ruto, his deputy and other public officials are set to receive hefty pay rises, according to a government document seen by AFP Friday. They are due to get a 14 per cent salary hike over two years, Kenya’s Salaries and Remuneration Commission (SRC) said in a proposal, which will raise Ruto’s gross monthly salary to 1,546,875 shillings ($11,000). Members of parliament will earn a basic salary of 769,201 shillings ($5,400) topped up with hefty extras such as a $54,000 bonus to buy a car and $2,600 a month to maintain the vehicle.
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Kenya’s minimum monthly wage is 15,120 shillings ($107). The salary increases will go into effect on Saturday but could be overturned pending a public discussion. No date has been set for the discussion, but Kenyans have protested online, accusing politicians of seeking office for personal gain at the expense of the poor. Ruto himself weighed in on the issue on Friday, urging the SRC to reconsider the increases for top government officials. “We need to make sure that the gap between the person paid the least and the person paid the most is not too big,” he said. Ruto came to power last year on a promise to revive the economy and put money in the pockets of impoverished Kenyans.
But one of his first acts was to slash food and fuel subsidies introduced by his predecessor Uhuru Kenyatta. Kenya is one of the most dynamic economies in East Africa but about a third of the population lives in poverty. the opposition has staged several protests over the cost of living crisis which degenerated sometimes into deadly street clashes between police and demonstrators. The country is sitting on a public debt mountain of almost $70 billion or about 67 per cent of gross domestic product (GDP), and repayment costs have jumped as the local currency trades at record lows of around 140 shillings to the dollar.
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© Agence France-Presse
