The government’s growing desperation is evident in the recent numerous increases in fees and levies for basic public services.
These are coming at a time when the majority of the people, especially those in salaried employment, are struggling to cope with the high cost of living, as the prices of basic commodities skyrocket.
It started with the implementation of the high taxes in the Finance Act, 2023, especially the doubling of the value added tax (VAT) on fuel to 16 per cent and some statutory deductions, including the 1.5 housing levy.
The take-home for these employees has drastically shrunk, as National Health Insurance Fund (NHIF) contributions were also enhanced.
And as the workers suffer, so do their employers, who are paying more in statutory deductions and also grappling with higher production costs and other expenses due to the high fuel prices.
Now, the government has suddenly shifted its focus to seek other sources of revenue and enable it to meet its financial obligations. The State has, for instance, increased fees and fines on land transactions, college education, replacement of national identity cards, processing of passports and fines for traffic offences.
The Ruto administration has resorted to the fees and fines paid to the state agencies for various services as it seeks to raise Sh112 billion in non-tax revenue to supplement taxes in the current financial year.
The various state departments are, therefore, expected to collect a record Sh431 billion in fees and levies—which explains the desperate adjustments. This is a 35 per cent increase from the last financial year.
The problem is that these additional funds are expected to be raised from the same people who are really struggling to make ends meet. Many will not be able to afford the services whose charges have been increased.
Although it is true that some of the fees and charges have not been adjusted for a long time, there is a need for a more reasonable or gradual review.
Policymakers must be aware of the fact that these key services must not be priced beyond the ability of most citizens, many of whom urgently need them.