NAIROBI, July 2 (Xinhua) -- Kenyans have to dig deeper into their pockets starting this month as new government taxes that touch on various basic items take effect.
The tax measures announced in this year's budget presented in parliament last month by the Treasury raise prices of kerosene, mobile money use, bottled water, chocolate and banking charges, among others.
Electricity consumers are also set to pay higher tariffs as the government migrates into a new billing system.
For users of mobile money, the National Treasury raised the excise tax from 10 percent to 12 percent.
On the other hand, kerosene users, mainly poor families across the East African nation who use the fuel for cooking and lighting, have to shoulder an additional 0.03 U.S. dollars on the cost of a liter of the fuel.
The government raised the tax from 0.07 dollars to 0.10 dollars bringing the current cost of the commodity to 0.87 dollars in the capital Nairobi.
Manufacturers of sugar confectionaries that include chocolates and candies were slapped with 0.20 dollars excise duty per kilo, a move that is set to see prices of the items go up.
Last week, the Energy Regulatory Commission announced a new electricity billing structure that will see consumers at the bottom-segment of the market nearly pay double of what they pay currently.
Homes that consume 50 kilowatt per hour (KWh) of electricity per month will from now henceforth pay 12 dollars, up from 6.7 dollars previously. Consumers of 200KWh, on the other hand, would pay 49 dollars up from 41 dollars.
Importers of vehicles with engine capacities above 2500cc were also slapped with a new excise duty of 30 percent.
Several manufacturers and firms affected by the new changes have already passed the taxes to consumers.
"Pursuant to the Finance Bill 2018 and the Provisional Collection of Taxes and Duties Act, we have made the following adjustments to our Mpesa tariffs," Safaricom announced on Saturday to subscribers of its popular mobile money service.
Banks have similarly passed the new excise tax of 0.05 percent which affects customers who transact at least 5,000 dollars to their customers. Equity Bank is among institutions that has announced to customers of the new charges.
The new charges put Kenyans in a tight spot, with the poor set to be hit harder than the rest of the members of the society, amid declined or stagnated incomes.
"Not all of us can afford cooking gas, which the government wants us to use instead of kerosene. At 0.90 dollars per litre, this is very expensive. What are we going to use because there is also no firewood after logging was banned," Moses Andemo, a resident of Kakamega, said on Monday.
Kerosene in Kakamega retails at a higher price than in the capital or the port city of Mombasa due to the longer distance it has to travel.
"Many people here use kerosene. When these prices rise, it means we must forego some meals because it becomes unaffordable to cook three meals," said the motorbike transport operator, noting the government should have dealt with adulterators of the fuel instead of increasing the tax on kerosene.
Clothes seller Peter Njue in Nairobi said he would have to find new ways of sending money to his parents and even suppliers to avoid high bank and mobile money charges.
"I have made up my mind. I will now be depositing money in someone's account at a banking agent which is free instead of sending the money via phone," said Njue.
Some employers have also started deducting a 0.05 percent housing contribution from the salaries of those in formal employment, a move that would see workers lose part of their income.
The new tax measures, according to analysts, would hit the poor much harder than the rest of the segments in the East African nation's economy.
"The poor are certainly going to find it harder to survive as they try to balance how to spend their money on various basic needs. With incomes being as low 1 dollar a day, it makes life difficult because one has to budget all his daily needs from the money, a near impossibility," said Henry Wandera, an economics lecturer in Nairobi.
The new taxes are expected to push up inflation going forward. Last month, inflation stood at 4.3 percent from 4 percent in May.
The average inflation rate for the first half of 2018 decreased to 4.2 percent from 9.8 percent in the same period in 2017.
