The National Transport and Safety Authority (NTSA) has no legal mandate to set fares, the Matatu Owners Association has established.
This comes after President Uhuru Kenyatta issued a warning to Matatu operators who have not lowered their prices following his announcement that the VAT on petroleum products had decreased from 16 percent to 8 percent.
Last Thursday, the president sent back to parliament the Finance Bill 2018 with amendments to cut the VAT tax by half rather than completely dismiss it as members of the National Assembly had initially wanted.
The president subsequently directed NTSA to terminate the licenses of PSV operators that are not adhering to rates established by the transport authority following a special meeting with Members of Parliament under the Jubilee ticket in State House.
“President Kenyatta insisted that transporters should not increase fares beyond those recommended by the NTSA,” said State House in a statement after the meeting.
Simon Kimutai the Chairman of Matatu Owners Association and lawyers contracted by the Matatu Association were however adamant that the NTSA had no legal powers to determine Matatu fares. The operators also insisted that fares attached to their vehicles are not legally binding since they only serve as guides.
The hike in fare prices is as a result of the recent implementation of a 16 per cent VAT on petroleum products that took effect on September 1, 2018. This inadvertently led to matatu operators increasing fares by almost 20 percent.
Members of the National Assembly are currently in Parliament discussing the tax proposals in the Finance Bill 2018 tabled by the Head of State. The House is expected to vote on whether to implement or disregard the tax which is vital to the government plans to close gaps in its fiscal deficit and funding of essential programmes.
Whatever Parliament votes on will without a doubt affect the lives of Kenyans dealing with the high cost of living.