By Treezer Michelle Atieno
The Finance Bill 2024 has sparked intense debate in the country, particularly concerning its
impact on the transport sector. The bill proposes new taxes that could significantly affect
ride-hailing services like Uber and Bolt. These companies have already threatened to exit the
Kenyan market or hike fares if the bill passes, raising concerns about the broader implications
for transport and daily life in the country.
The Finance Bill 2024 introduces a raft of tax measures increasing government revenue.
Among these is a proposed 15% tax on digital services, directly impacting ride-hailing
companies operating in Kenya. Uber and Bolt, the leading ride-hailing platforms, have voiced
strong opposition to the bill, warning that the increased tax burden could force them to raise
fares or cease operations in the country altogether. This potential exit or fare hike has
significant ramifications for the transport sector and the everyday lives of Kenyans.
If Uber and Bolt were to exit the market, it would create a significant gap in the transport
sector. These companies have become integral to urban mobility in Kenya, providing a
reliable and convenient alternative to traditional taxis and public transport. Their departure
would leave many commuters with fewer transport options, likely leading to increased
demand for and pressure on existing public transport systems. This could result in
overcrowded buses and matatus, longer wait times and less reliable transport services.
Moreover, the potential exit of Uber and Bolt would adversely affect the livelihoods of
thousands of drivers who depend on these platforms for income. Many drivers have invested
heavily in vehicles and rely on a steady flow of customers provided by these ride-hailing
services. Without Uber and Bolt, these drivers would struggle to find alternative sources of
income, exacerbating unemployment and economic hardship in urban areas.
Alternatively, if Uber and Bolt decide to stay in the market but significantly hike fares, the
financial burden would shift to consumers. Increased fares would make ride-hailing services
less affordable for many Kenyans, particularly those who rely on these services for daily
commutes. This could push more people to use public transport, increasing pressure on
strained systems. Higher transport costs would also disproportionately affect low-income
earners, exacerbating economic inequality.
The Finance Bill 2024's implications extend beyond just ride-hailing services. The proposed
taxes would also affect other areas of the transport sector, including vehicle imports and fuel
prices. Increased taxes on imported vehicles could make cars more expensive, discouraging
car ownership and potentially increasing demand for public transport. Similarly, higher fuel
taxes would raise operating costs for all transport services, likely leading to higher fares
countrywide.
Public transport in Kenya is already grappling with numerous challenges, including
inadequate infrastructure, safety concerns, and inefficiencies. The additional pressure from
potential changes in the ride-hailing sector could exacerbate these issues, making it even
more difficult for Kenyans to access reliable and affordable transport.
In response to the proposed bill, stakeholders from various sectors have called for a
reconsideration of the tax measures. They argue that while increasing government revenue is
vital, it should not come at the expense of essential services like transport. There are calls for
a balanced approach that considers the economic realities of ordinary Kenyans and the
importance of maintaining a vibrant and accessible transport sector.
The government must weigh the potential benefits of the new tax revenue against the possible
negative impacts on the transport sector and the broader economy. A nuanced approach,
including stakeholder consultation and impact assessments, could help mitigate adverse
effects while achieving fiscal objectives.
