Kenyan long-distance transporters have announced plans to increase charges starting next month after Parliament voted to double the value added tax (VAT) on petroleum products to 16 percent.
Kenya Long Distance Truck Drivers Union (KLDTDU) chairperson Roman Waema said a number of challenges, including fuel and process of renewing licences, had driven up the cost of doing business in the transport sector.
“We have no option but to hike transport charges once fuel prices go up and this will definitely affect cost of moving cargo along Northern Corridor. The increment of advance tax for commercial vehicles will further make the cost goes up,” said Mr Wang’oo.
Transporters said with the Finance Bill 2023, the current cost of transporting goods will increase from the current minimum charge of Sh235 per kilometre for transit goods and Sh225 for local cargo. Some transporters have announced plans to downsize to reduce cost of operations.
Zedekiah Bundotich Kiprop, who owns Buzeki Logistics, said his company would downsize by eliminating some staff positions.
In addition to doubling VAT on petroleum products, the Finance Bill proposes to double advance taxes from January 2024 when transporters will pay Sh3,000 per one tonne of load capacity per year for vans, pick-ups, trucks, prime movers, trailers and lorries.
The Bill has, however, exempted advance tax for tractors or trailers used for agricultural purposes.
