Truck owners have warned of high transport costs due to an increase in taxes.
The transporters said the new taxes that came into force in September, will drive them out of business.
The taxes were imposed on services offered on transit goods.
Services on transit goods are exempted from tax instead of being zero rated.
According to VAT administration rules, when goods are zero rated, the services associated with the transport of goods may be taxed but the taxes are refundable.
But when tax is exempted, Kenya Revenue Authority does not process the claims.
The Kenya Transporters Association has written a protest letter to the revenue authority, and wants the tax man to correct the anomaly.
According to the association Acting Chief Executive Officer Wellington Kiverenge, the irrecoverable tax of about 11 per cent will be passed to consumers, increasing the cost of transporting goods and resulting in high commodity prices.
“We will be disadvantaged since in Tanzania, where such services are zero rated, transporters are able to claim taxes. In a business that does not have huge margins like transport, this will lead to losses,” he said in the letter.
The Valued Added Tax on transit goods services has in the past sparked controversy.
When it was introduced in September last year, the tax man backtracked after transporters protested.
Source: Daily Nation