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Bolt and Uber Could Raise Prices in Kenya Due to Government’s 6% ‘Significant Presence’ Tax
Bolt Uber Kenya Fare Hike: Uber and Bolt, popular ride-hailing companies, may increase their fares in Kenya due to a new 6 per cent tax levied by the Kenyan government. The levy was placed on major foreign companies operating within its borders.
This tax is part of a new legislation called the Finance Bill 2024. It is currently still being considered by the country’s lawmakers.
Bolt Uber Kenya Fare Hike
According to the finance bill, all non-resident (foreign-owned) companies will be charged a new 6 per cent tax. This is known as the Significant Economic Presence tax, on their gross revenue.
The Finance Bill 2024 also proposes an increase of the Digital Service Tax, which both companies are eligible for due to the digital nature of their services, from 1.5 percent to 3 percent, translating to double the rate being paid previously.
Bolt Uber Attends Kenya Parliamentary Hearing To Prevent Fare Hike
Uber and Bolt attended the parliamentary committee hearing where they told the lawmakers that the taxes have the capacity to tank overall revenues for them as well as income for drivers.
The ride hailing companies also told the parliamentary committee that new taxes proposed in the Finance Bill 2024 would negatively affect their operations. Uber and Bolt warned they might be forced to increase ride fares to survive.
Also Read: NLC Strike: Ride-Hailing Drivers to Stop Uber, Bolt, InDrive Operations from Monday, June 3
Celia Kuria, Bolt’s tax manager, told parliament that the tax reviews would push earnings from taxi rides that cost less than KES500 to a net loss. The apps, used by urban and peri-urban dwellers, mostly cover short trips.
George Abasy, Bolt’s public policy manager, also stated that introducing the 6% SEP Tax would result in an effective rate of 22% on gross turnover. This was low for a non-resident in the digital market space, excluding operating costs.
President Sees Bolt Uber Kenya Fare Hike As A Positive Effect On The Country
However, while there are many concerns about the Kenya Finance Bill 2024 proposals, President William Ruto sees them as a way to improve the country’s tax environment and pay down its debt.
