If You Don’t Want To Pay Motor Vehicle Circulation Tax, Don’t Use Your Car – MP Kuria Kimani
Kuria Kimani, the MP for Molo Constituency and chair of the National Assembly Finance Committee, has defended the government’s proposal to impose a motor vehicle circulation tax on car owners.
The proposed tax in the new Finance Bill 2024 aims to introduce an annual fee to be paid when acquiring motor vehicle insurance. This levy will be set at a minimum of Ksh.5,000 and will amount to 2.5 percent of the vehicle’s value.
Kimani, describing the levy as “a hybrid of income and wealth tax,” explained on Tuesday that the objective is to promote investment in a detailed local public transport system.
He pointed out that more advanced economies have well-established and highly efficient public transport systems, during an interview with NTV.
“Every time investors consider investing in our public transport system through public-private partnerships, feasibility studies show that our preference for driving makes it difficult to attract foreign investment,” the MP noted.
Kimani argued that Kenyans prefer using cars due to the inadequacy of the public transport system and suggested that with a better alternative, people would choose not to drive.
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Although the motor vehicle circulation tax will be associated with the annual renewal of insurance policies, Kimani asserts that Kenyans can avoid the tax by opting not to use their cars.
“If you don’t want to pay the motor vehicle circulation tax, then don’t use the car, just like how you avoid the expressway if you don’t want to pay for it,” he explained.
According to the bill, ambulances and government-owned vehicles will be exempt from the motor vehicle circulation tax as stated in the Privileges and Immunities Act.
Insurance companies that fail to collect and remit the motor vehicle tax within five working days of issuing a motor vehicle insurance cover will face a penalty of fifty percent of the uncollected tax in addition to the actual amount of the uncollected tax.
If You Don’t Want To Pay Motor Vehicle Circulation Tax, Don’t Use Your Car – MP Kuria Kimani