When you pay for electricity and fuel, the biggest amount of your money goes to taxes and levies as opposed to what you have purchased.
According to renowned data analyst Elijah K. Samuel, up to 63 per cent of every Sh. 1,000 you spend on electricity goes to taxes and levies.
“Buying the electricity of Sh. 1,000 (assuming a monthly usage of less 100 Units), only about 37 per cent goes to consumption, and the rest 63 per cent goes to taxes and levies,” said Samuel.
He added that 35 per cent goes to fuel energy while 9.4 per cent goes to forex. “It is worth knowing that 35 per cent goes to the Fuel Energy Charges, and 9.4 per cent to the Forex Charges,” he said.
According to Samuel, this indicates that Kenyans are buying taxes and levies, and getting electricity tokens as a bonus. He further points out that this unfortunate scenario is replicated with fuel charges.
“Buying fuel, assuming petrol; a litre is trading at Sh. 177.30, but of this, Sh. 86.36 is the landing cost; but the remainder of Sh. 90.94 is going to other expenses like taxes, levies and profit margin,” he said. “Again, seem we buy taxes and get fuel as bonus.”
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Samuel said that this scenario is worsened by the taxes and levies Kenyans working in the formal sector are subjected to.
“Before you digest the above, remember someone who is working in the formal sector has about 25 per cent to 30 per cent taxed through Pay As You Earn (PAYE) taxes,” he said.
“Now the remainder of 70 per cent to 75 per cent is what VAT is coming for after purchase of nearly everything, and then we have these crazy levies too on necessities like electricity, water and fuel.”
According to the analysis by Samuel, taxes and levies have become one of the biggest contributor to the high costs Kenyans are paying for electricity and fuel.