After the House of Lawmakers voted to accept the 16 percent VAT that was put forward in the Finance Bill 2023, entrepreneur and one-time candidate for governor Bundotich Zedekiah Arap Kiprop alias Buzeki said that he is immediately implementing a strategy to reduce the size of his goods firm.
When the new tax goes into effect, the price of fuel is expected to go up, and the resulting higher price of fuel will lead to a rise in the overall cost of transportation.
Because of this, according to Buzeki, he will have to get rid of his old vehicles and take them to a scrap yard to be recycled.
Because of the increase in the value-added tax on fuel from 8% to 16%, we have decided to formally scale up our operations with immediate effect.
The junkyard will receive all of the outdated trucks, even those with emissions standards of Euro 3 or below. In a tweet he sent out on Wednesday evening, he remarked, “Leteni lori ya Thitima.”
Buzeki recognised that the reduction in the number of vehicles his transportation firm operates would almost certainly result in the loss of jobs.
He said that the present government appears to lack a strategy for job creation and is primarily focused on collecting income for expenditures. “The incumbent leadership appears to be without a plan for job creation.”
The Buzeki Group of Companies is a corporate conglomerate in Kenya, and Buzeki serves as both the Executive Director and founder of the company.
The corporation is a prominent participant in the logistics and heavy commercial transportation sectors in East Africa, which gives job opportunities to people not only in Kenya but also in other parts of the region.
On Wednesday, lawmakers voted to approve the planned increase in the VAT on fuel to 16 percent.
A total of 184 members of parliament voted in favour of raising the value-added tax from 8% to 16%, while 88 opposed the measure.
All 272 members of the legislative assembly cast votes.
In May, President William Ruto justified the choice he made to raise the value-added tax (VAT) on petroleum goods to 16%, claiming that he wanted to generate a total of Sh50 billion from the increased VAT on petroleum items.
During a conversation, he made the following statement: “The eight percent is going to provide us Sh50 billion for assisting with roads throughout the country.”
According to Ruto, it is crucial to take this action to close loopholes that businesses are abusing to prevent the government from receiving the funding it so desperately needs.
Kenyans reacted online;
“So you are downsizing even before the impact of the the proposed tax is felt, which means the projected increase in fuel prices is not the real reason for downsizing.
” VAT is not a business cost, unless a business is unable to pass on the VAT to the end consumer… Input VAT incurred in purchase of fuel will be offset against output VAT.
” The second reason to show you’re dishonest. When you’re bidding for transport contract, it’s obvious all transporters buy fuel at same price. So, why is your company not competitive? Is it because you want higher margins than industry average, mismanagement or …why?
” Let me ask ,so you my brothers from the valley,you think you will not suffer the looming harsh economic times.Wphen you defend govt in enacting such punitive taxes ,will you be in a different country from the rest of us,or are the taxes different for those who in rift valley