Car Owners Face New Wealth Tax Proposal
The National Treasury has proposed implementing a Motor Vehicle Circulation Tax that will be levied on Kenyans purchasing cars at the time of procuring insurance.
The National Treasury stated in its Medium Term Strategy for the Financial Years 2024/2025-2026/2027 that the tax, which will be classified as a wealth tax, will be paid annually.
According to the Ministry led by Prof. Njuguna Ndung’u, Kenyans will begin paying the tax once the purchaser obtains the entire ownership of the vehicle.
“There will be a minimum tax amount payable by all motor vehicle owners in addition to a graduated amount based on the engine capacity of the vehicle” the document read in part.
According to the Treasury, the motor vehicle circulation tax and the carbon tax that will discourage the use of fossil fuels will be implemented simultaneously.
ALSO READ: Government to Introduce Tax on Education Services
The government views the levy as a solution that simultaneously addresses two problems: generating revenue and preventing air pollution.
“Government will explore the possibility of introducing a carbon tax based on the carbon content of fossil fuels,” the Treasury explained in the document.
According to the document, the government will progressively introduce excise taxes over the lifetime of imported vehicles.
The government is considering implementing an excise tax on tractors, forklifts, excavators, and earthmovers.
To accomplish its goals, the government also seeks to implement tax incentives that encourage the use of renewable energy.
Similarly, the government is also seeking to review the current taxes on electric vehicles that are environmentally favorable to support the transition into a green economy.
Car Owners Face New Wealth Tax Proposal
