On March 19, MPs raised concerns over a proposed 15 percent fuel levy, warning it could increase consumer costs. The government argues the levy aims to fund infrastructure improvements, but MPs worry about its impact on local goods and citizens’ finances. Minister Kabera assured a gradual increase and contingency measures against price spikes. The bill is under ongoing scrutiny in Parliament.
On March 19, Members of Parliament expressed concerns regarding the proposed 15 percent fuel levy from the government, citing potential increases in the cost of goods and services for consumers. This proposal is included in a draft law aimed at amending the existing fuel levy framework by implementing an annual levy on motor vehicles. The new bill proposes replacing the current fixed charge of Rwf115 per litre with a percentage-based levy derived from the cost, insurance, and freight (CIF) value of petrol and diesel imports.
Godfrey Kabera, Minister of State for National Treasury at the Ministry of Finance and Economic Planning, defended the introduction of the levy, pointing out that the current fixed charge has remained unchanged since 2016, failing to address rising fuel prices and road maintenance needs. He stated, “This levy accounted for 15 percent of the price of petrol in 2016, but fuel prices have since increased, while the levy remained unchanged. The proposed adjustment ensures the levy reflects current market realities.”
The government articulates that additional revenue from the levy will improve road infrastructure, alleviate traffic congestion, and secure sustainable funding for road maintenance. MP Jean Claude Ntezimana cautioned that increasing the levy might jeopardize Rwanda’s competitive fuel pricing, traditionally maintained at low levels despite the nation being landlocked. He questioned, “If this levy is increased while prices are already high, won’t that place an even greater financial strain on citizens?”
MP Beth Murora echoed similar sentiments, emphasizing that increased levies could disadvantage locally produced goods in comparison to cheaper imports. “There are already products sourced from abroad that arrive at lower prices than those produced domestically. How do we ensure that this tax does not further disadvantage locally made goods?” she asked.
Minister Kabera assured MPs that the increase would be gradual, projecting an adjustment from Rwf115 to Rwf150 per litre—an overall increase of Rwf35—emphasizing that the burden of road maintenance should primarily fall on road users instead of the general population. He also noted the government’s readiness to implement mitigating measures in the event of unexpected fuel price spikes. He concluded, “We recognize the need to balance revenue generation with economic stability. If fuel prices rise too sharply, the government can step in with interventions to prevent excessive price hikes.”
The bill remains under parliamentary review as MPs seek detailed insights regarding its implications for both the economy and the cost of living.
In summary, the proposed 15 percent fuel levy has prompted significant concerns among Members of Parliament regarding its impact on consumer prices and local competitiveness. While the government justifies the levy as a necessary adjustment to support infrastructure and maintenance, the MPs’ apprehensions reflect a broader unease about the potential economic consequences. Continued parliamentary scrutiny is essential to ensure a balanced approach that safeguards citizens’ financial well-being.
Original Source: www.newtimes.co.rw
